The USA after Default
Published in Vzglyad
(Russia) on 12 December 2013
by Iraklii Kakabadze (link to original)
The U.S. has successfully avoided default. The date of the “world hegemon’s” probable bankruptcy has been delayed to Jan. 15, 2014, when the government debt ceiling will again be reached. What is in store for Americans and the rest of the world, if Washington is unable to manage its finances?
For the last four years the world has been anxiously watching events in the U.S., where a pre-default situation was unfolding. Furthermore, the Republican opposition gave the Democratic government less and less money and time. The debt ceiling has been raised for now, although in October the world once again tensely watched the budgetary-political crisis in Washington. Now, a new “X” moment is appearing on the horizon.
America is not a poor country. In the last 30 to 40 years it has raised reserves in times of difficulty, as in 1987, and in 2008-9. However, if they are not able to find a solution in January 2014, we will start to see the collapse of banking and trade, and this will not be limited to the U.S. In the next stage, production will begin to be affected, as the U.S. is still the main global market — everything is tied to it.
It may be possible to find leverage to delay bankruptcy, but they will use peaceful methods. America’s debts may still swell and the bursting of the bubble may be postponed. But in the military talks between the Republican and Democratic parties, a mistake on one day could cause severe consequences for the global economy. Then the collapse will be deep and far-reaching.
There is freedom of speech in the U.S., but only with lobbyists and sponsors. “Young hawks” confess freely and often to military interference in the business of other countries, but the American economy and finances are not in a fit state to be able to support a serious local war.
It is also necessary to understand that the crisis lowered the level of living standards and continued the debt problem. Even the elderly — from 55 to 64 years old — are forced to spend 22 percent of their income paying off old debts.
Everybody knows about the material problems of U.S. citizens, and this is not important. What is much more important is what many Americans and the rest of the world have already seen: The state social system, which everyone accepted as ideal, is much worse than the Canadian system or that which exists in Western Europe. The situation with medical insurance is appalling.
In America, the crisis has only strengthened the pressure of private capital on society. It is not for nothing that Republicans are calling for a “strict economy.” Such a policy without default would worsen the life of the average American if only because social welfare would be the first thing to be cut.
So it is time for the people to think about whether the default has already had an effect on their lives.
For the last four years the world has been anxiously watching events in the U.S., where a pre-default situation was unfolding. Furthermore, the Republican opposition gave the Democratic government less and less money and time. The debt ceiling has been raised for now, although in October the world once again tensely watched the budgetary-political crisis in Washington. Now, a new “X” moment is appearing on the horizon.
America is not a poor country. In the last 30 to 40 years it has raised reserves in times of difficulty, as in 1987, and in 2008-9. However, if they are not able to find a solution in January 2014, we will start to see the collapse of banking and trade, and this will not be limited to the U.S. In the next stage, production will begin to be affected, as the U.S. is still the main global market — everything is tied to it.
It may be possible to find leverage to delay bankruptcy, but they will use peaceful methods. America’s debts may still swell and the bursting of the bubble may be postponed. But in the military talks between the Republican and Democratic parties, a mistake on one day could cause severe consequences for the global economy. Then the collapse will be deep and far-reaching.
There is freedom of speech in the U.S., but only with lobbyists and sponsors. “Young hawks” confess freely and often to military interference in the business of other countries, but the American economy and finances are not in a fit state to be able to support a serious local war.
It is also necessary to understand that the crisis lowered the level of living standards and continued the debt problem. Even the elderly — from 55 to 64 years old — are forced to spend 22 percent of their income paying off old debts.
Everybody knows about the material problems of U.S. citizens, and this is not important. What is much more important is what many Americans and the rest of the world have already seen: The state social system, which everyone accepted as ideal, is much worse than the Canadian system or that which exists in Western Europe. The situation with medical insurance is appalling.
In America, the crisis has only strengthened the pressure of private capital on society. It is not for nothing that Republicans are calling for a “strict economy.” Such a policy without default would worsen the life of the average American if only because social welfare would be the first thing to be cut.
So it is time for the people to think about whether the default has already had an effect on their lives.