Leading article: Reckless forces from within that are pushing America to the brink

Related Topics

Days ago it was fashionable to dismiss warnings of a default by the US government as scare talk.

After a nail-biting moment, Republicans opposed to raising the debt ceiling would back down and a last-minute compromise would enable everyone to relax. But as the wrangling continues in Washington, and Tuesday's deadline looms, a solution that enables Barack Obama's administration to pay its bills is looking as if it might not materialise.

One problem is that it's no longer clear that there are just two sides to this dispute. While Democrats want the debt limit lifted far enough to allow the crisis to be pushed beyond the 2012 presidential election, the fractured Republicans barely agree on a way ahead. Last night the Republican House leader, John Boehner, scrambled to put together an alternative Republican plan, cutting spending by $900bn in the longer term while temporarily raising the debt limit for a few months.

As a sop to the Tea Party, whose supporters torpedoed a similar bill on Thursday, Mr Boehner tacked on an absurd-sounding proposal making the package contingent on a constitutional "balanced budget" amendment, which would then of course have to go to the states for ratification. As that will be wholly unacceptable to the Democrat-controlled Senate, it is not clear that the passage of Mr Boehner's plan brings a resolution of the crisis before Tuesday much closer. If the logjam has moved at all, it is by an inch.

Just possibly House and Senate will discover some hitherto invisible piece of common ground, but don't count on it. Some members of the Tea Party relish the prospect of a default, believing it will destroy "big government" at a stroke. John McCain, Mr Obama's Republican opponent in the 2008 presidential race, calls them the "bizarros". They don't mind. Many are freshmen, elected only seven months ago on fiercely anti-Washington tickets, and steeped in an evangelical Christian ideology that sees the world as a setting for a grand settling of accounts between good and evil.

It's anybody's guess what will happen if Congress doesn't reach a deal before Tuesday on raising the debt ceiling beyond the current limit of $14.3trn; we haven't been here before. The last time Washington technically defaulted was in 1933, when the US refused to pay its creditors in gold. That is very different from not being able to pay one's bills at all.

The Treasury and the state governments will, of course, put together contingency plans this weekend for short-term financing, albeit in secrecy. But in the absence of a congressional agreement, even if the Fed staggers on, the price will still be heavy. The possible consequences of no deal include loss of America's triple-A credit rating, a run on money markets, a rise in interest rates and nervousness among holders of dollars throughout the world, China especially. Beijing has been the world's largest purchaser of US Treasury bonds in recent years. In that case, we can also forget President Obama taking a lead on questions beyond America's borders, such as Israel-Palestine, the Arab Spring or climate change. This will necessarily be a much more inward-looking America.

Do Tea Party Republicans care? Not necessarily. Sarah Palin's famed ignorance of foreign parts is a plus to her supporters, a sign of her American First values. Beyond loving Israel and hating Iran, the Tea Party doesn't have time for "abroad", or what it insists is alarmist talk about a default. Ms Palin has dismissed it as an "Obama drama". The omens do not look good.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page


In Sickness and in Health: 'I'm really happy to be alive and to see Rebecca'

Rebecca Armstrong
Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine