October 16, 2013
A risk to be avoided
This is a story I don’t want to write. As a Canadian, I’ll be accused of sticking my nose in where it’s not wanted.
But in terms of its potential impact on the global economy, it’s too big to be ignored.
It would be derelict of me not to say something.
If Washington’s financing crisis is allowed to continue, the U.S. Treasury will run out of money on Oct. 17. Expert opinions are being sought but, in all truth, no-one really knows what will happen after that date.
Tough decisions will have to be made on where limited funds from tax receipts will be allocated.
Will some foreign creditors, used to rolling over their bond holdings, start to worry that they might be disappointed if they demand payment instead?
It’s in the nature of financial crises that a small spark can start a firestorm.
Then it’s a race to the exit door with each investor trying to sell quickly in order to salvage more than the next guy.
Matters can deteriorate too rapidly for anyone to step in and restore order.
Recession, crippling interest rates and more unemployment may be among the consequences.
How can there be any question that this is a risk to be avoided?
Let’s be charitable and say that what is happening in Washington has little to do with personalities.
Let’s further concede that an acceptance of few entitlements may be written into the DNA of most Americans.
Never mind that to many other people around the world, a public responsibility for universal health care has become a given.
The Patient Protection and Affordable Care Act has become existing legislation.
It was passed during the president’s first term and endorsed when he won re-election.
One party shouldn’t hold up all spending because it has a different “vision” than the electorate.
And, cherry-picking programs for funding is a formula for abuse and resentment.
The Bill Clinton-Newt Gingrich showdown came with a significantly different backdrop. It was purely budgetary, with the bottom line still on the table.
For the sake of his own presidency, and for all future presidents, Mr. Obama is taking a stand on principle.
If Obamacare were to be blasted apart, what would protect other pillars of U.S. governance from being attacked by the same means?
How would a GOP president react if some of his or her party’s most treasured accomplishments came under threat?
There is a faction within the Republican Party that wants to turn back the clock. They’ve led their colleagues down an ill-advised path.
When the Republican Senator from Arizona and former GOP presidential candidate, John McCain, was interviewed during CNN’s Situation Room, he said it was a fool’s errand to tie approval for the budget to de-funding “Obamacare”.
With the Democrats holding the Senate and the president having veto power, that was never going to happen.
If the Republicans eventually move back into 1600 Pennsylvania, then the whole issue can be revisited.
(Subscribers are encountering problems while trying to sign-up for coverage with exchanges over the Internet. A Canadian company, Montreal’s CGI Group, has played a major role in developing the software to handle enrolments. The deadline for filling out forms is still more than two months away. Phone-in registration is another option that seems to be working okay.)
In the court of public opinion, neither the president nor the Democrats are escaping the present impasse unscathed.
The approval rating for the Republicans, however, has sunk to a barely registering 12%. As a result, the GOP’s demands are undergoing transformation.
While speaking further to Wolf Blitzer, Mr. McCain made an appeal to the president to offer his party a concession so that it can withdraw with some measure of dignity.
The most likely “candidate” seems to be removal of the excise tax on medical devices.
All-day meetings between the Executive and members of Congress will no doubt continue.
A resolution, when it’s reached — and something will eventually be worked out — can hardly come quick enough.
There are many examples around the world where parliamentary systems have resulted in minority and coalition governments. Italy is the supreme example of the kind of chaos that can ensue.
Under such arrangements, when there is a falling out between dance partners, new elections are called.
The American two-party system, featuring fixed polling dates and a system of checks and balances between the White House, Congress and the Judiciary (i.e., the Supreme Court), has always been a beacon of stability.
Uncle Sam is a symbol of democracy and freedom that other nations aspire to.
With a great deal of ingenuity, and by being too clever by half, American politicians are proving every bit as adept as their counterparts in the rest of the world at dismantling the machinery of government.
A repeating pattern of stalemate and gridlock needs to be rejected.