I was pleased today that the value of my paltry stock portfolio rose with the announcement of a predicted agreement to increase the US public debt constraint. The move involves a forward commitment to substantially cut government spending and not to raise taxes. It seems like a fairly comprehensive Republican victory.
But it is a terrible deal given the struggling character of the US economy. Ultimately it means less demand and job layoffs during a period where the US economy is really struggling. A prolonged US recession will worsen it’s debt worries and put a further clamp on the world economy and hence, for that matter, on the stock values that increased with their customary myopic precision today. (Update – perhaps a sense of realism has already set in!)
I am also depressed that the far right of US politics seemed to have gained the upper hand and that President Obama seems reluctant to stop them doing so. The current difficult macroeconomic debt situation can be largely attributed to the wars and the tax cuts that President George Bush engineered. The fiscal expansion that Obama undertook was n inevitable need given the dire state of the US economy following the financial crisis. Many Americans on both sides of politics understand this. Continued stagnation of the US economy however is more likely to be sheeted home to Obama which intensifies the win of the extreme right.
I have long been an Obama supporter but his lack of spine in dealing with the economic and social terrorists of the Republican Party surprises me. These economic vandals have damaged the US and the world economy by pursuing their own political objectives using discredited economic theory. Of course this encourages fresh bouts of ideological terrorism.
The US has been further weakened in the eyes of the world by the actions of inept politicians who have racked up yet another victory. Its the political face of an ongoing US decline. (98)