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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2620

US government shutdown: poisoning the political atmosphere by positioning debt ceiling

Hemantha Abeywardena writes from London…

The debt-ceiling issue, which evolved into a full-blown political crisis in the US, has been simmering in the cauldron of politics for some time - with the potential threat of government shutdown fluctuating between the demarcations of farce and menace.

With just four days left before reaching a compromise on raising the debt ceiling, both the Republicans and Democrats appear to be doing their best to reach a face-saving deal to end the impasse, as the time-span of the stand-off has stretched far beyond their imaginary borderline.

Affordable Care Act, sarcastically dubbed Obamacare, which provides subsidies to the less-fortunate Americans while making health insurance schemes within their reach, has been the main bone of contention between the two political camps. The stubborn Republicans say that Obamacare comes at the expense of what they call, Middle America.

The Republicans know very well what Obamacare means for both President Obama and the Democrats – a major political achievement. Therefore, they see it as a ‘neutralizer’ – of course, for the promises that they think President Obama has failed to deliver on.

As the intensity of the negotiations increases with every passing hour, the bad blood between the two political camps is becoming all too apparent on every conceivable front; the tendency of trading insults is gradually eclipsing the need of the hour – exchanging ideas for an amicable settlement.

A democratic congressman, for instance, shouted the other day, “These people are Neanderthals,” while comparing the die-hard Republicans who hold sway over the crucial phase of negotiations to our exclusively carnivorous, chin-less ancestors.

At present, if opinion polls reflect the true pulse of the nation, the Republicans stand accused of the mess that they got the whole government into. Since some Republicans have turned their anger at those who obstinately stick to their guns in their own party, the deadlock is bringing them more and more under global spotlight, in extreme cases, associating them with damaging stereotypes. For instance, some brand the hardliners as a cult of 3G – God, gun and government.

The unpleasant development has pushed the US, which has been lecturing the other nations on issues ranging from human rights to virtues of capitalism on regular basis, into a tight corner while clipping its wings at more than one place. When other nations, especially the ones often used to be on the receiving end of preaching, demand the world’s only superpower to keep its own house in order, it cannot be music for ears, as far as the ruling elite are concerned.

In the absence of a solution in the offing, global leaders are becoming bolder in venting out their frustration and anxiety in proportion to the looming uncertainty – still in a diplomatic manner, though. The anxiety reached a psychologically critical point when President Obama warned about the unthinkable – defaulting on US debt.

The leaders of Japan and China, for instance, expressed their concern this week while reminding the US of its obligation to safeguard the investments of their respective citizens: "The US must avoid a situation where it cannot pay, and its triple-A ranking plunges all of a sudden," Japan's Finance Minister Taro Aso said recently; “The US is the world's biggest economy and a major country issuing reserve currency," China's Vice-Minister of Finance Zhu Guangyao said during at a press conference; "Safeguarding the debt is of vital importance to the economy of the US and the world," Mr Guangyao further said to highlight the gravity of the issue.

Both British Prime Minister and the IMF, meanwhile, expressed concern over the impact that the debt problem could potentially make on fragile global economy. Mr Cameron fear how a meltdown in the US could wipe out the green shoots that many UK economists see on the horizon as far as the British economy is concerned.

We all know how the uncertainty over the Quantitative Easing – QE – placed the currencies of emerging markets – India, Brazil and Indonesia - on a downward spiral. On that basis, we can only imagine the disaster that may spread across the globe, if the US defaults on its debt after failing to bridge the chasm between the two competing political camps in their pursuit of relative dominance.

- Asian Tribune -

US government shutdown: poisoning the political atmosphere by positioning debt ceiling
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