Simon English: Mark Twain was right - take the US off your worry list


Outlook Mark Twain said: "Those of you inclined to worry have the widest selection in history." Another one for your list: the US "fiscal cliff".

Worry warts have been banging on about this supposed impending disaster for a long while. President Barack Obama's victory gave fresh stimulus to the calamity crew, those for whom America has been about to go bust any minute now for at least the last 40 years.

From Reuters yesterday: "US investors will hit trading floors this morning with the same President and the same problems in gridlocked Washington. First up: a looming budget crisis that could send the US economy reeling."

First of all, investors don't "hit" trading floors any more than you or I do but, that annoyance aside, this is another scare story that makes no sense. Like lions on the loose in obscure country villages, it may make headlines, but it should not cause sleepless nights to anyone who doesn't spend too much time on the wrong websites (put the internet down, sir, back away slowly).

The "fiscal cliff" is a $600bn package (other scary numbers are available) of tax increases and spending cuts due soon. The Democrats don't like the cuts, the Republicans are just mad – mad – about any hint of tax increases.

The government will be in deadlock! The deficit! Etc.

The US government finances will spin out of control (again) and the world's leading nation will go bust, after which so will we all.

Take a deep breath because I bring good news: none of this will happen.

The debate about the cuts and the spending will be public and vociferous, almost as if a fully functioning democracy were behaving exactly as it should. Then a deal will be reached, amusingly close to what we shall pretend was the "last minute" for everyone's lives to continue as normal.Before and after this, the worriers will bang on about US government borrowing being "out of control" and predict total disaster, any day now.

An alternative way to look at it is this: Government debt is not like credit-card borrowing. If it were we'd have been in trouble long ago.

There's no particular expectation that America will ever pay its debts off, the question is whether it can service them (easily).

New borrowings will pile on top of old ones, and the American economy will keep growing to cover the debt. China will keep buying US Treasuries at almost whatever rate is needed to keep American consumers buying its manufactured goods.

It might prefer not to, but it can't pull the plug, not least because to do so would crash the value of its US-heavy investment portfolio.

All of this is a confidence trick, if you like, but when it comes to America, there are plenty of reasons to be confident. For one, it just re-elected the smartest, most able President of our lifetimes. Whatever happens to the rest of us, America will be fine.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Women protest at the rape and murder of Jyoti Singh
tvReview: It's a tough watch, but the details of the brutal gang rape and murder of medical student need to be shared if we want to strive for global gender equality
Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
ebooksA special investigation by Andy McSmith
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Arts and Entertainment
Jeffrey Archer holds up a copy of 'Kane and Abel', a book he says was ripped-off by Bollywood
Life and Style
food + drink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers