I thought I could get away without writing about this terrible conundrum that we currently find ourselves. Our government is shut down, and we are facing another fiscal cliff. If congress doesn’t raise our debt ceiling, then we will run out of money to pay our bills. On October 17th we will have spent our tax income, and will be forced to sell our homes. Well maybe not the last part, but we are going to run out of money unless the government votes to allow itself to borrow more money.
How do other countries see us at this point in time? Personally, I am embarrassed by the way our politicians are behaving. They haven’t passed an actual budget in years, and they have effectively shut down a good portion of the services provided to American citizens. What is interesting though is the fact that we have shut down many of the so-called necessities and yet we are still moving along. Maybe some of the pork that has been temporarily closed is not necessary spending and our leaders could save some money by not starting them back up?
But back to my question how do others see us? The Economist can give us a pretty good indication of how other countries view our problems in the article “No Way to Run a Country.” Now there is a mouthful. I think that sums up what others are saying about us. The author starts the article by saying “When you are brawling on the edge of a cliff, the big question is not who is right, but what the hell are you doing on the edge of a cliff?”
Our congress has not passed a budget since 1997, and the blocking now is due to Obamacare. I think it may be time to stop fighting our whether Affordable Health Care is an option, and start thinking about how to make it work. If there are 46 million people without healthcare, then what are we going to do about it. And if what I read yesterday that some folks are actually finding cheaper and better insurance, then maybe this isn’t so bad after all.
I know the question involves how do we pay for it. I know that the debt level is at critical mass. But fighting and stonewalling isn’t going to get us as a country to where we need to go.
The Economist says that what is happening will make our country unstable. I think that should scare us all. It may be that if we continue to fight Obamacare then it may destroy the opportunity. “Obamacare sits on two pillars. Everyone is obliged to have insurance, and the insurance firms are barred from charging people more because they are already ill.” Or, if the politicians continue to fight, then a precedent is set “making the United States ungovernable.” This becomes really bad because of who we are as a nation.
“America enjoys the exorbitant privilege of printing the world’s reserve currency.” This is a huge responsibility that we should not take lightly. Also, our debt “is considered a safe haven, which is why Uncle Sam can borrow so much, so cheaply.” If we default on our debt we could lose the ability to borrow money at low rates. If we lose this then business will suffer, as well as financial markets. Also, “American Treasuries are very liquid and safe, they are widely used as collateral. They are more than 30% of the collateral that financial institutions such as investment banks use to borrow in the $2 trillion tri-party repo market, a source of overnight funding.”
So Politicians of the United States, you have a choice. You can begin to work together and make good decisions, or continue down this path leading to us losing our ability to borrow cheaply, and hurt all those others that rely on our currency for stability. The time is now!
And that is my thought for the day!