It amounts to this, basically, and if the news programmes could just say this outright instead of unnecessarily complicating it, I think a lot of people would have a clearer idea of what is going on...
The US has something called a "debt ceiling." This is a limit on how much money they can borrow and it is something the US imposed on itself during the first World War. The debt ceiling is continually raised so that the state can meet its legal obligations - paying interest on the debt, fighting wars, paying Social Security and funding Medicare. Naturally, the cost of these obligations keeps going up when you're dealing with the current global financial mess, because more people are out of work, less people have health insurance and the level of debt keeps going up.
Raising the debt ceiling is a pretty routine thing normally. It happened 17 times under Ronald Reagan and 7 times under George W Bush. Over the summer of 2011, the debt ceiling needed to be raised again. For this to happen, Congress needs to approve the decision and the Republicans were not having it, largely due to the influence of the Tea Party.
The Tea Party are basically lunatics, much in the same mould as Margaret Thatcher who once declared "there is no such thing as society." This is the Tea Party position - instead of paying a reasonable level of tax to fund the state so that the state can meet its obligations to the people, the Tea Party want lower taxes and a smaller state. It's an "everyman for himself" movement, which basically equates to "fuck the poor." If you look at their support base, they also tend to be anti-immigration, anti-gay and anti-Muslim. And their favourite politician is Sarah Palin.
The Tea Party wanted to use what should have been a routine thing to call for a smaller state, for public spending cuts and some even went so far as to suggest the US should default on its loans (which would have led to even higher interest rates on the debt). So the Republicans held out for spending cuts, refusing to raise the debt ceiling without them. The Democrats wanted tax increases along with a smaller amount of spending cuts. A deal was eventually reached, but the consequences are this:
1. The Tea Party are now being taken seriously.
2. Bigger spending cuts than originally planned will occur.
3. The stock market is jittery, which has international consequences.
4. The US' credit rating has been downgraded.
If some of this seems familiar, it's because we're facing a similar situation in Britain - a conservative, anti-state movement that is seeking to use the worldwide financial crisis (caused in itself by their own policies in the 1980s) to do what they've wanted to do all along. These people do not believe in fundamental human ideals such as looking after one another, living up to your responsibilities and helping the disadvantaged. They talk instead of "pulling yourself up by the bootstraps" despite the fact that the vast majority of them come from priveleged backgrounds themselves and have never had to pull themselves up by anything.
And I think, fundamentally, there are a lot of people who oppose the ideals of these movements. Only nobody has ever bothered to explain it to them. Instead, we describe the US debt ceiling crisis or the Eurozone crisis as if these are concepts too difficult for the average person to understand. And the only part that comes through clearly is the sense of overwhelming fear.
Understand this: we are in a bad economic situation and the roots of it were laid in the 1980s. We had a recession then too, and we were so scared of having another that we flew off in the wrong direction - getting rid of the regulations and laws that stopped private companies from doing whatever the hell they liked. And it has led us back here again. We can either keep hold of our ideals - the idea that the most vulnerable in society must be protected and that this is the number one priority of the state - or we can panic again and lay the roots for another economic crisis in 30 years time.
That's assuming, of course, that we get out of this one first.
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