Wonkie has been closely monitoring the curious situation in the USA with respect to the recent shutdown of government over the last two weeks. Whether the USA is setting best practice in terms of government, or comedy, South Africans would be smart to take note.
In a nutshell, the debt ceiling is the maximum amount the U.S. government can borrow from the public. The money they raise, by selling Treasury bonds publicly, is used for all manner of social services, and to pay the interest on their own debt.
The issue is that the U.S. government has already borrowed as much as is allowed by the current debt ceiling – US$16.7 Trillion. If this debt ceiling is not raised by Congress by 17 October 2013, the U.S. government will not be able to meet its basic financial obligations – i.e. pay its many employees, and repay the interest on their existing loans.
What happens when Joe Schmoe can’t make his loan payments? In short, very bad things for Joe Schmoe. The case for government is the same, except the consequences in this situation will be global. If America cannot be trusted to repay its debts, the entire global financial system will be at risk. At best, the world would wind up accelerating into a much more severe, and protracted recession.
With its well-designed political system containing strong checks and balances, Barack Obama cannot simply decide to raise the debt ceiling by himself. That decision needs to be vetted by other political institutions – in this case, by Congress. The challenge is that the Republicans (the opposition) have thrown their weight against the debt ceiling raise, using the opportunity to try to strong-arm Obama to modify some of his policies, notably on healthcare (affectionately termed Obamacare).
In short, the Republicans are negotiating on local U.S. policy issues at the expense of, well basically the world economy. Wonkie doubts that they would be stupid enough to let it reach that stage, but the world will only be sure about that a week from now.One thing is clear, the importance of having a strong opposition is evident in the USA. In South Africa, this is sorely lacking. One need only look at the pathetic state of the last election to appreciate that. Opposition parties offered nothing in terms of alternative strategy, or direction – their campaigns were almost entirely based on fear-mongering and ‘Stop Zuma‘ rhetoric.
All indications so far are that the DA has learnt nothing from its past failures. Wonkie thought the “E-tolls – proudly brought to you by the ANC” poster was witty and worth an appropriate laugh. Witnessing the moronic government reaction to it was even funnier. Still, the fact remains that this appears to follow the same strategy as the last elections – ‘vote for Us to stop ABCDE’.
What South African citizens need is a strong, unified opposition with alternative strategies to achieve the country’s big goals – credible alternatives, not just witty billboards. Failing that, a South African government shutdown may not be such a bad second choice.
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Unfortunately, it seems Obama needs to win more than a few massive US Powerball lotteries in order to dig the USA out of its current situation. You, on the other hand, might be happily able to resolve your share of the national debt problem by visiting this updated lottery website, or trying your hand at one of the many top-rated Rand Online Casino options instead.
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