America: Closing the Government Today and the Bases Tomorrow?

The government of the biggest economy in the world did it: it closed its federal chambers and obstructed the work of more than 800 thousand employees with unpaid leave. The closure affects important government services and institutions, such as the space agency (NASA), the Environmental Protection Agency (EPA), and public health institutions undertaking medical research. It has also caused the closing of museums, parks, and military cemeteries in places in the world where American soldiers have fallen during the world and regional wars, both those that the United States launched and in which it engaged.

The reason for the crisis is the refusal of the House of Representatives, where the Republicans have the majority, to pass a budget for 2014, which was passed by the Senate, where the Democrats have the majority. This budget included appropriations for the health insurance law, which Congress approved in 2010 and then became, by rights, one of the most prominent achievements of President Barack Obama.

Why did the Republicans shut down the government?

Because they accuse Obama of being a communist, a leftist radical, and say that he wants to expand government spending on social services.

The Republicans are the ones who call for a smaller state and more freedom, meaning the scale of general state spending and social and health services, in particular. On the other hand, the Democrats, especially their president, Obama, pursue an open social policy and the interests of more than 50 million Americans benefiting from health insurance.

Spending on social welfare requires imposing more taxes, especially on the rich. They are mostly conservatives. Thus, the Democrats want to raise taxes, whereas Republicans want to lower taxes. Thus, Obama did not delay in accusing the Republican opposition of waging an “ideological crusade”: “They’ve shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans”.

While the U.S. remains the biggest economy in the world without a budget and without a government, Americans remember that a similar crisis happened during the era of President Bill Clinton and lasted 21 days. However, the United States, its citizens, and even the rest of the world are awaiting another, possibly more serious crisis when spending is projected to hit the debt ceiling on Oct. 17. That problem is exceeding the debt ceiling [by going] over 16.7 trillion dollars, which is equivalent to more than 108% of the GDP. If the Obama administration fails to obtain an agreement in Congress to raise the aforementioned spending limit, the United States may not be able to meet all its debt obligations. Analysts for Standard and Poor’s (S&P) say that this situation might “lower the sovereign rating to ‘SD’ (selective default)” whereas today it is AA+.

Where to go from here?

In the opinion of Paul Krugman, an American economist who won the Nobel Prize in 2009, the United States’ problem today is that its political regime is ineffective, which allows the Republicans to threaten to disable the government against the background of crazy demands.

British Prime Minister David Cameron warned that “It is a risk to the world economy if the United States can’t properly sort out its spending plans and its deficit reduction plans.”

President of the World Bank Jim Yong said that the economic doubts of the United States raise our concerns to the highest degree. So, the doubt, with the existence of other manifestations of fragility in the world economy, can inflict serious damage to developing and emerging markets in Africa, Asia, and Latin America.

The truth is that repercussions of the emerging American monetary crisis will not only affect the economy of the United States, but will also extend to its military bases abroad. The United States has about 1000 military bases of varying size abroad. They require exorbitant expenditures. Against the diminishing American interest abroad and at the forefront of its oil interests and especially after the beginning of extraction of shale gas and the possibility of exporting abundant quantities to global markets, the subject of the military bases and their usefulness will certainly find their way into Congress and thus reduce their number and their expense.

This possibility reminds the strategic analysts of the theory of the British historian, included in his famous book “The Rise and Fall of Great Powers”, that Great Powers (and empires before them) start to decline and fall when they become unable to meet their external obligations and their high costs.

It is clear that the monetary and economic crisis that has plagued the United States since the summer of 2008 still negatively affects the country’s economy and left its repercussions on institutions at home, such as America’s domestic obligations. So, will the government closure lead to the closure of its bases abroad?