Zapatero and Obama: Tying Their Hands to the Squanderers

Although the agreement reached between Republicans and Democrats regarding the debt ceiling amounts to little and is not a solution to the financial problems of the U.S., it is very likely that the Republicans would not have been able to gain further ground than the Democrats — let alone an Obama who has an obsession with public spending in his DNA. The spineless austerity program that has been passed does not constitute a panacea for a country whose public debt is about to reach 100 percent of its GDP, but at least it slows down the pace at which the country is moving toward a situation that is frankly unsustainable. Even so, precisely because of the meager adjustment, it is fairly likely that the ratings agencies will end up downgrading the United States’ sovereign debt rating.

If anything has been demonstrated to us by the Obama government, it is that the public sector stimulus plans and the refusal to adopt any measures to reduce spending, which are in large part responsible for the budget deficit, have been entirely ineffective at reanimating the economy. Only yesterday we learned that the country’s manufacturing activity dropped to its lowest level in the last two years; another negative statistic released only one week later revealed that economic growth during the second trimester of the year was substantially lower than expected.

The fragility of the American giant and the possibility that its debt may be downgraded have reinforced fears about the stagnation of the global economy, which would in turn have a terrible effect on the weakest links in the chain — for example, Spain. Our country, abstaining from reforms or any authentic austerity measures, desperately needs external demand to pull it out of this mess, but this external demand relies critically upon the good health of other countries.

This is what will determine the future of our growth, our employment and our public finances — the single issue of global economic recovery. We should take note of what has happened in the United States: Even for it, with an economy infinitely more flexible and free than ours, spending more than saving has not helped one bit. And although we do not ourselves have a tea party, foreign investors monitor our situation closely and constrain the consequences of Zapatero’s wasteful anxiety. Only yesterday, he was given the worst rating, in the form of a risk premium, since the creation of the Eurozone. The countdown to the general elections should not slow for a minute the ever more urgent reforms that we need.