Late Sunday afternoon the leadership of both chambers of both parties and the president all came to an arrangement of sorts to end the stalemate over lifting the debt ceiling, thus avoiding default. The agreement comes just in the nick of time since August 2 was the drop dead date established by the Secretary of the Treasury.
The economy is just too fragile to hold hostage and we aren’t out of the woods yet. Both the House and the Senate now need to agree. Will that happen? It remains to be seen. This is not the time for stubbornness.Extremist factions of both parties simply cannot hold the country hostage just to get their own way.
What will happen? Will the debt ceiling be lifted or will the president be forced to use section 4 of the 14th amendment that says “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
The devil is in the details. Meanwhile, countries around the world see national crisis as a self-inflicted wound and suggest that the United States has already done a great deal of damage to its own reputation. According to the New York Times:
The United States government may not be so lucky with its reputation.
Even before negotiations went down to the wire on Sunday night, the bitterness, division and dysfunction that resounded around the world in recent weeks as the United States veered toward default did more than just fuel a perception that Washington is approaching Japan-like levels of political gridlock. Among foreign leaders and in global markets, the political histrionics have eroded America’s already diminishing aura as the world’s economic haven and the sole country with the power to lead the rest of the world out of financial crisis and recession.
It has chipped away at the global authority of President Obama, who was celebrated abroad when he came to office as a man who would end an era of American unilateralism. Now the topic of discussion in other capitals is whether the Age of Obama is giving way to an Age of Austerity, one that will inevitably reduce America’s influence internationally.
Thanks a lot, folks. But that was the grand plan anyway, wasn’t it? Anything to damage Obama.