Shutdown: The West Consumed by Debt
Published in Les Echos
(France) on 18 October 2013
by Dominique Seux (link to original)
(France) on 18 October 2013
by Dominique Seux (link to original)
Translated from
by Charlotte Schwennsen.
Edited by Philip Lawler.
The three lessons of the “provisional” end of the American budgetary psychodrama.
The agreement was reached on the razor’s edge. Several hours before the gong that would have announced the U.S. was in default, a deal was reached and the worst was prevented. It is a resounding defeat for Republicans and the tea party, and a victory for Barack Obama. The compromise, which gives the American political community three more months to try to escape the ridiculous impasse in which it has been stuck, has three consequences. These three consequences extend beyond the Washington political palinodes — whose first was not, it must be said, at the level of the dialogue of the cult TV series, The West Wing, in French.
1. The first is economic. This agreement saved the world economy from a leap into the unknown at a time when many things are fragile. According to certain experts, the payment default would have consequences comparable to the Lehman Brothers bankruptcy collapse in 2008 — that is to say, incalculable. No one knows, but it is certain that it would be disastrous to see the first world economy unable to repay its debt. The blockage these last weeks has already had economic effects. Has the path toward worldwide recovery, for all that, been opened?
2. The second lesson is historic. What is striking is the way in which the West is collectively entangled in debt problems, which marks, all the same, a loss of sovereignty. 2008: Crisis of private debts in Anglo-Saxon countries. 2010: Crisis of public debts in Europe. 2013: Budgetary crisis in the United States, not to forget the environmental debts (climate degradation) that we will leave to our children. Countries of the Euro Area, as calculated yesterday, will still borrow nearly 900 billion Euros next year to make ends meet. To tell the truth, no one knows how these oceans of debt will be repaid or erased. But during the time that we are floating in oceans of debt, emerging countries have all the time to emerge. History is being written before our eyes.
3. The third lesson is political. American historian Francis Fukuyama has the right word when he denounces and attacks the triumph of the “veto-cracy,” in speaking of the United States. The multiplication of the checks and balances annihilates power. The world, this morning, breathes a sigh of relief, but it is only temporary. The same subjects will return, without a doubt with less dramatic art, starting Jan. 15. These last weeks take us back to an image: those of two cars, Republicans and Democrats, driving toward each other, each driver waiting for the other to yield and turn around. The winner is the one who jumps out of the car last. This ridiculous game is quite dangerous. In France, some will say that with regard to debt, a good debate is better than silence. They will perhaps not be entirely wrong, provided that the debate leads to an outcome.
The agreement was reached on the razor’s edge. Several hours before the gong that would have announced the U.S. was in default, a deal was reached and the worst was prevented. It is a resounding defeat for Republicans and the tea party, and a victory for Barack Obama. The compromise, which gives the American political community three more months to try to escape the ridiculous impasse in which it has been stuck, has three consequences. These three consequences extend beyond the Washington political palinodes — whose first was not, it must be said, at the level of the dialogue of the cult TV series, The West Wing, in French.
1. The first is economic. This agreement saved the world economy from a leap into the unknown at a time when many things are fragile. According to certain experts, the payment default would have consequences comparable to the Lehman Brothers bankruptcy collapse in 2008 — that is to say, incalculable. No one knows, but it is certain that it would be disastrous to see the first world economy unable to repay its debt. The blockage these last weeks has already had economic effects. Has the path toward worldwide recovery, for all that, been opened?
2. The second lesson is historic. What is striking is the way in which the West is collectively entangled in debt problems, which marks, all the same, a loss of sovereignty. 2008: Crisis of private debts in Anglo-Saxon countries. 2010: Crisis of public debts in Europe. 2013: Budgetary crisis in the United States, not to forget the environmental debts (climate degradation) that we will leave to our children. Countries of the Euro Area, as calculated yesterday, will still borrow nearly 900 billion Euros next year to make ends meet. To tell the truth, no one knows how these oceans of debt will be repaid or erased. But during the time that we are floating in oceans of debt, emerging countries have all the time to emerge. History is being written before our eyes.
3. The third lesson is political. American historian Francis Fukuyama has the right word when he denounces and attacks the triumph of the “veto-cracy,” in speaking of the United States. The multiplication of the checks and balances annihilates power. The world, this morning, breathes a sigh of relief, but it is only temporary. The same subjects will return, without a doubt with less dramatic art, starting Jan. 15. These last weeks take us back to an image: those of two cars, Republicans and Democrats, driving toward each other, each driver waiting for the other to yield and turn around. The winner is the one who jumps out of the car last. This ridiculous game is quite dangerous. In France, some will say that with regard to debt, a good debate is better than silence. They will perhaps not be entirely wrong, provided that the debate leads to an outcome.