The Empire Backs Off
Lowering the credit rating of the U.S. is the last degradation in the chain of economic and political failures. The big picture reveals the end of an era.
The American empire is in the retreat phase. This is a sad truth, particularly for us as Israelis, but there is no escape from it. When the markets open this morning, this disturbing reality may break in the hard way; we had better all hope that it will not. Nonetheless, even if another collapse is prevented, the big picture shows the end of an era.
In the United States, one in six people, as of today, is living on food stamps. The housing market has suffered a 33 percent drop, the largest since the Great Depression, and practically a graver one. The American Engineers Association has rated the infrastructure of this colossal country (the one, in fact, that invented infrastructure) a D on a scale from A to F. The U.S. is deep in debt totaling more than $14 trillion, and solely during the past decade, it has run up about $9 trillion.
America still enjoys being the world’s largest economy and an unmatched hub of entrepreneurship and creativity; nevertheless, the industry has long since migrated to the new America: Asia. The empire’s withdrawal is not merely economical but physical as well. U.S. presence in Iraq is already scarce, and it drags toward the end of its existence in Afghanistan as well.
On Friday, the last affront arrived: the downgrading of the U.S. credit rating. Now, says Standard and Poor's, it’s preferable to buy bonds from Singapore, Lichtenstein or even Britain, though it fails to extricate itself [from economic problems] and return to healthy growth. The proud America, leader of the free world and the global market, is suffering from harsh words and especially the assessment that its credit rating might go down further. Any country other than the United States would experience a severe crisis in the wake of such a critical rating downgrade; America will be still able to borrow at reasonable interest rates for one prosaic reason: there’s no competition to the U.S. bond market. In an insecure world, an insecure America still remains a good option.
Obama’s Responsibility, the Republicans’ Fault
The credit downgrade primarily symbolizes the American political system’s inability to rise above the petty and silly in order to cope with the crisis afflicting the world and America itself. Just as major historical forces in the past, stupidity is the first prophetess of a breakdown. Meticulous reading of the S&P opinion report reveals investors’ genuine concern: their feeling that American politicians have lost a healthy sense of logic.
The responsibility belongs fully to the Accountable in Chief, President Obama. But the fault is, almost entirely, the Republicans. It is just incredible how GOP candidates contend with each other to condemn Obama because the credit rating was lowered during his term in office. It is strikingly unbelievable considering that the credit rating agency has directly criticized their party — the Republican Party. Instigated by tea party activists, GOP representatives resolutely declined a comprehensive deal the American president proposed that included dramatic cuts in government services and raising taxes for the rich. “No way,” they announced, “we won’t elevate taxes, not even a penny.” This in a country whose deficit was expanding, whose debt to the world kept growing: Still the majority party in Congress was unwilling to tax its millionaires.
And you cannot forget who is responsible for this deficit. The United States of America has racked up more than $14 trillion in debt since World War II; George Bush, Jr. bears accountability for over $6 trillion — 44 percent of the entire American debt. Clinton, for the sake of comparison, added little more than a trillion, and Obama an additional $2.4 trillion, nearly $1 trillion of that through the stimulus plan for the U.S. economy. The Bush government produced this enormous debt. However, Bush’s successors in the Republican Party dare to blame the current administration for “big government” and threaten to burn the club down!
The problem is that their club is also ours; it is everybody’s club, not only in Israel but in the entire world. As Madeleine Albright once said, “…we are America; we are the indispensable nation.” We all should hope that its backing off will end and its resurgence will be close.
The author is foreign news editor of Channel 10.
The American empire is in the retreat phase. This is a sad truth, particularly for us as Israelis, but there is no escape from it. When the markets open this morning, this disturbing reality may break in the hard way; we had better all hope that it will not. Nonetheless, even if another collapse is prevented, the big picture shows the end of an era.
In the United States, one in six people, as of today, is living on food stamps. The housing market has suffered a 33 percent drop, the largest since the Great Depression, and practically a graver one. The American Engineers Association has rated the infrastructure of this colossal country (the one, in fact, that invented infrastructure) a D on a scale from A to F. The U.S. is deep in debt totaling more than $14 trillion, and solely during the past decade, it has run up about $9 trillion.
America still enjoys being the world’s largest economy and an unmatched hub of entrepreneurship and creativity; nevertheless, the industry has long since migrated to the new America: Asia. The empire’s withdrawal is not merely economical but physical as well. U.S. presence in Iraq is already scarce, and it drags toward the end of its existence in Afghanistan as well.
On Friday, the last affront arrived: the downgrading of the U.S. credit rating. Now, says Standard and Poor's, it’s preferable to buy bonds from Singapore, Lichtenstein or even Britain, though it fails to extricate itself [from economic problems] and return to healthy growth. The proud America, leader of the free world and the global market, is suffering from harsh words and especially the assessment that its credit rating might go down further. Any country other than the United States would experience a severe crisis in the wake of such a critical rating downgrade; America will be still able to borrow at reasonable interest rates for one prosaic reason: there’s no competition to the U.S. bond market. In an insecure world, an insecure America still remains a good option.
Obama’s Responsibility, the Republicans’ Fault
The credit downgrade primarily symbolizes the American political system’s inability to rise above the petty and silly in order to cope with the crisis afflicting the world and America itself. Just as major historical forces in the past, stupidity is the first prophetess of a breakdown. Meticulous reading of the S&P opinion report reveals investors’ genuine concern: their feeling that American politicians have lost a healthy sense of logic.
The responsibility belongs fully to the Accountable in Chief, President Obama. But the fault is, almost entirely, the Republicans. It is just incredible how GOP candidates contend with each other to condemn Obama because the credit rating was lowered during his term in office. It is strikingly unbelievable considering that the credit rating agency has directly criticized their party — the Republican Party. Instigated by tea party activists, GOP representatives resolutely declined a comprehensive deal the American president proposed that included dramatic cuts in government services and raising taxes for the rich. “No way,” they announced, “we won’t elevate taxes, not even a penny.” This in a country whose deficit was expanding, whose debt to the world kept growing: Still the majority party in Congress was unwilling to tax its millionaires.
And you cannot forget who is responsible for this deficit. The United States of America has racked up more than $14 trillion in debt since World War II; George Bush, Jr. bears accountability for over $6 trillion — 44 percent of the entire American debt. Clinton, for the sake of comparison, added little more than a trillion, and Obama an additional $2.4 trillion, nearly $1 trillion of that through the stimulus plan for the U.S. economy. The Bush government produced this enormous debt. However, Bush’s successors in the Republican Party dare to blame the current administration for “big government” and threaten to burn the club down!
The problem is that their club is also ours; it is everybody’s club, not only in Israel but in the entire world. As Madeleine Albright once said, “…we are America; we are the indispensable nation.” We all should hope that its backing off will end and its resurgence will be close.
The author is foreign news editor of Channel 10.