Life imitating Art – US Debt ceiling

One can’t help but wonder if the the lack of agreement between the Democratic and Republican parties over the proposed extension of the US debt ceiling is anything more than grand political theatre, although this time it appears to be a different ball-game with the growing role and influence of the “tea-party” members.

Perhaps more telling is the role of David and Charles Koch and the political and organisational might they bring to bare on the debate in Washington. If nothing else, these guys are serious.

If West-Wing writers are to be believed, then we will see a last minute agreement that will [probably] temporarily extend the limit. This has to make you smile…

The larger danger is perhaps the longer-term rancour and uncertainty these events will inevitably inject in to US politics. Going so close to the wire with those that genuinely are prepared to default, will spook the market and ratings agencies. I doubt the US will default, although this time, I BELIEVE they might.  That’s all it takes for the markets to desert the ship. No doubt the ratings agencies will think long and hard about the ratings….

The Atlantic had an interesting article in May of this year, outlining the IMF’s charting of the US Debt and the similarities to Japan a decade ago.

This is a very new world. A generation of western nations that have spent, but not necessarily built [in the good times] will begin to demonstrate the lack of foresight that previous generations have had.

In its simplest form here in Australia, we have had decades of tax-cuts [enough for milk-shakes and hamburgers or perhaps a new television] but when it comes to genuine national priorities like Climate Change, Broadband networks, rail [fast or otherwise], ports, shipping, medical research, education, indigenous health etc, we seem frozen in the weakness of what will win the next election rather than bi-partisan commitments to improving the nation over the medium and long-term.

Modern western politics is not functioning as well as it should [perhaps it is doing the best it can?] and many are missing out on the riches and benefits experienced by increasingly smaller numbers within those societies.

The growing tail of inequity is seen most starkly in the education and health outcomes in communities across not only our own country, but many western democracies.

Challenging times ahead.

Update: Standard and Poors downgrades US to AA+

Edit: August 8th

Drew Westin writes an opinion piece in the New York Times, thinking aloud about Barack Obama’s mind-set in the Presidency – What Happened to Obama’s Passion

Paul Krugman also comments on Westin’s piece with his own observations – “Stuck in the muddle”