The growing political crisis in the USA seems hard to avoid this morning.
For historical reasons the US government is subject to borrowing limits that are set periodically by the House of Representatives and Senate. The current limit is $31 trillion, and it has been reached. That means it needs to increase if, as is normal in recent times, the US government is to continue its deficit spending.
That deficit spending has been high of late. Covid has boosted it, significantly. Before that $7.8 trillion was added to the total during Trump's period in office: a record sum, of course. Most of that went to fund tax cuts for the wealthiest people and companies in the USA.
Now the Republican majority in the US lower House of Representatives wants to prevent an increase in the US borrowing limit, which they say is unaffordable without questioning who created it and why.
The result is a standoff. Janet Yellen, as Treasury Secretary, is already planning emergency spending cuts. These include things like cutting funding for pensions for federal employees and the armed forces, for the time being. Without any solution to the standoff within months the US will face a government closedown and a default on US interest payments.
That, of course, is exactly what those engineering this exercise went. The Republicans hate government. Most of all, they hate government led by a Democrat President. They will do all they can to disable it.
Their price for freeing up spending is already known. It is cuts to Medicare and social security payments for the most vulnerable in the USA. The far-right want to punish those most at risk for the profligacy of their own past-President that always and only had the intention of aiding the best off. They do not care about the resulting suffering.
The sad thing is that the Republicans are bound, to some extent, to eventually get their way. There will have to be a compromise to keep the US government going at some point in time. The Republicans are bound to get what they want, to some degree at least.
This matters for the USA, of course. The horrible inequality within that society will be exacerbated as a result. Real people will suffer and die as a consequence. The Republicans won't care, or they are just too stupid to do so.
This matters to the UK as well. What the Republicans do one day happens here soon afterwards. The Tories are good mimics.
The Tories cannot, of course, object to artificial debt limits in this country. We do not have such a thing. We have other ways to impose misery.
Austerity is one such way. Hunt is doing that.
Unnecessarily increased interest rates is another way. Andrew Bailey is delivering that.
Both are acting with the indifference of the US Republicans for those will suffer as a result of their policies.
Both are imposing misery with deliberate intent.
I was on Nicky Campbell's programme on BBC Radio 5 yesterday morning, up against a chump for Conservative Home. I suggested that the government is engineering a recession right now. Asked to justify that I said it was because they were stupid.
Henry Hill from Conservative Home exploded and tried to deliver a load of ad hominem attacks on me: to his credit, Nicky Campbell stopped that.
I justified my comment using Bailey as an example. He must know that raising interest rates will cause misery and does nothing whatsoever to stop inflation caused by war in Ukraine, but he is raising rates anyway when inflation will in any event inevitably fall this year.
Either he is stupid, or he thinks the country is stupid enough to believe him. Either way misery and a deliberate shift of reward in society from working people to those with capital takes place - as he and the Republicans both want, because nothing else explains their policies.
This then is deliberately chosen misery. As I keep saying, it is a choice to engage in economic civil war on your own population, and it is one right-wing politicians seem keen on.
Their maliciousness knows no limit. We need politicians and commentators who will argue with them. I proved myself willing to do so. I wish others would.
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To quote Steve Barclay again, ‘consciously deciding to inflict harm’ on the UK population.
The bit he missed was about doing so whilst rewarding Tory donors and the very wealthy.
We must always remember that the dirty war being fought in the West is that nothing can be done about the problems we face – growing inequality/unfairness, climate change, looking after society’s elderly, work versus automation etc.
It’s all supposedly through ‘natural causes’ that these things happen and there is nothing we can do apparently.
And who thought that Dr Pangloss was just a fictional character?
And so typical that Panglossian thinking can only be afforded by the rich and powerful.
https://www.opendemocracy.net/en/elective-recovery-taskforce-private-healthcare-nhs/
Trying to hide what they are doing to the NHS.
Hill is a nasty piece of work with particularly unpleasant, and typical Tory attitudes to Ireland. Not a scintilla of embarrassment that Ireland is far ahead of the UK on every metric of human wellbeing from child mortality to longevity and everything in between–and Brexit is widening the gap fast.
Thanks to such odious imperialists the union is surely now on life support.
Nicky Campbell’s programme on BBC Radio 5
https://bbc.co.uk/sounds/play/m001h4fn
You’re on at 1:07:53
Thanks
Well worth watching the first two segments from ‘Alex Wagner Tonight’ on MSNBC on this topic, Richard. https://www.msnbc.com/alex-wagner-tonight
Keep up the good work Richard.
One of the most depressing aspects of any public debate in the UK is how pointless it is, primarily because so few opposition MPs, or any other participants that ought to know better, are prepared to take on and demolish the initial false premise that is always imposed by the Tories and their media.
I keep trying
More tomorrow….
https://www.bbc.co.uk/iplayer/episode/m001h9z2/politics-live-taxing-multimillionaires-more
Gary Stevenson was worth listening to , Richard.
Thanks
Agree totally bar one small point: there will not be any default on US Treasury interest. The US constitution makes interest a first charge on all Federal Revenues. The debt limit does prevent expansion of the money supply and therefore allows maturing bonds to be rolled over, at the price of economic misery from no additional issuance. It’s a distinction that few financial journalists understand.
Thanks