In a sign of the chaos and instability that now afflicts the world’s sole superpower, the US government had been “shut down” by the right-wing Republicans’ refusal to pass a new budget. Around 800,000 government workers have been stood down without pay.
But of even greater concern is the need to reach agreement on increasing the government debt ceiling by October 17 in order to avoid the US government defaulting on its debts. US government debt, in the form of bonds, has been seen as a safe investment in the wake of the global economic crisis. A default could trigger another round of global economic instability like that seen at the height of the global financial crisis in 2008.
The Republican Party, which controls the House of Representatives, has chosen to play a game of brinkmanship with government bills in order to demand the delay of President Obama’s health care reforms. Far-right Tea Party-aligned elements of the Republicans is holding the country to ransom because of their rabid opposition to Obamacare.
But Obama’s health care changes are far from radical. The ferocity of Republican opposition shows more than anything how far to the right the whole US political establishment has moved. Obama and the Democrats agreed to $85 billion in cuts this year, to unemployment benefits, schools and other welfare programs.
The latest standoff will likely result in another agreement to make even deeper cutbacks in order to slash the deficit. Once again, it is working class people that will bear the brunt of this political circus.
By James Supple