The US has been running on empty for years, and that a new era of American austerity is the only way to put things right. It no surprise that this is being called the most predictable crisis in US history. For who could dispute, when our government must borrow $4.5bn a day just to keep going, that our national debt is now an existential threat.
Everyone agrees something must be done, and quickly, but for now politics as usual predominates. Cuts and tax rises are both politically treacherous. Senior citizens, in particular, will vote against any changes to healthcare and retirement programmes.
The best that can be said is that both parties are now talking about constraints on spending, rather than new programmes, and of increasing revenues not by tax increases but through the elimination of special tax allowances. It may even be beginning to dawn on both sides that they are arguing in the path of an avalanche. Just think: in the few minutes it will take you to read this article, the US national debt will go up by over $6m. It will take more than a short-term deal to put that right. Continue reading »