What the American Debt Problem Doesn't Mean
Published in Le Devoir
(Canada) on 03 August 2011
by Serge Truffaut (link to original)
(Canada) on 03 August 2011
by Serge Truffaut (link to original)
Translated from
by Louis Standish.
Edited by Mark DeLucas
.
As depressing as it dangerous? What’s that? The debt agreement that American representatives adopted after months of debate, which is filled with a large amount of foolishness, non sequiturs, misinterpretations, augmented by a dose of fantasy. It’s pretty simple, really: The large majority of economists are screaming in unison that the agreement supported by President Obama is going to exacerbate the country’s already fragile economy. Among them, many even suggest that the president is making the same awful error that Franklin Delano Roosevelt made in 1937. Thinking that the Depression had ended, he drew up a budget geared towards cuts and austerity. The result? The country sank again into a recession a few months later.
Some early warning signs of a possible recession come from the tumbling markets, symbolized by a 265-point decline in the Dow Jones index. By the way, you must specify that this news, even more than Standard and Poor’s, hasn’t let up in the last seven sessions because of an economic contraction that some are predicting for the fall, following a first quarter in a term in which gross domestic product growth had been .8 percent. In short, the United States is stagnating.
Knowing that, Obama had the duty to make the climb. More exactly, he had a duty to impose a plan combining spending reductions and increases in revenue. This responsibility fell on him, not only for the well being of Americans, but also for the rest of the world. Because in Asia, like in Europe, the markets are already dropping, dropping, dropping, reflecting worries that the rough handling of this issue only makes the already bumpy management of the euro crisis more difficult.
This story leaves the bitter taste of political calculation, electoral opportunism to be precise, which has become everyone's primary motivation, including the president’s. What is that about? Here and there, Obama assures us that, for the sake of debt negotiations, he has multiplied his concessions in order to restore budgetary discipline, hoping to seduce electoral independents in his campaign for the next presidential election.
As early as last December the president of the United States had the chance to get the members of the Republican Party to know that, in the face of economic stagnation, he would whip out the right to veto any budget that fails to include increases in taxes. He had that chance, and he did nothing. Worse, he waited until the last minute, hoping for a bipartisan deal with a group taken hostage by the furious fools of the tea party. In the end, the last word belongs to Paul Krugman, Nobel prize-winning economist and columnist for the New York Times: “The President Surrenders on the Debt Ceiling.”
Some early warning signs of a possible recession come from the tumbling markets, symbolized by a 265-point decline in the Dow Jones index. By the way, you must specify that this news, even more than Standard and Poor’s, hasn’t let up in the last seven sessions because of an economic contraction that some are predicting for the fall, following a first quarter in a term in which gross domestic product growth had been .8 percent. In short, the United States is stagnating.
Knowing that, Obama had the duty to make the climb. More exactly, he had a duty to impose a plan combining spending reductions and increases in revenue. This responsibility fell on him, not only for the well being of Americans, but also for the rest of the world. Because in Asia, like in Europe, the markets are already dropping, dropping, dropping, reflecting worries that the rough handling of this issue only makes the already bumpy management of the euro crisis more difficult.
This story leaves the bitter taste of political calculation, electoral opportunism to be precise, which has become everyone's primary motivation, including the president’s. What is that about? Here and there, Obama assures us that, for the sake of debt negotiations, he has multiplied his concessions in order to restore budgetary discipline, hoping to seduce electoral independents in his campaign for the next presidential election.
As early as last December the president of the United States had the chance to get the members of the Republican Party to know that, in the face of economic stagnation, he would whip out the right to veto any budget that fails to include increases in taxes. He had that chance, and he did nothing. Worse, he waited until the last minute, hoping for a bipartisan deal with a group taken hostage by the furious fools of the tea party. In the end, the last word belongs to Paul Krugman, Nobel prize-winning economist and columnist for the New York Times: “The President Surrenders on the Debt Ceiling.”