Obama and Debt

Being a US expatriate, I feel it gives me a luxury of a 3rd party view of things in the US. While I have been a Democrat in my mind for a long time, it is more of a curiosity what happens.

The debt crisis, from an external viewpoint, has been confusing. The worst thing to happen in the US is that their debt rating will be downgraded. It will cause certain choices to be taken away from the American public and if we are talking about how hard things can be, a debt rating decrease in the States would probably come at top of the list. While the average joe may not understand the intricacies in global finance, they will understand very quickly the trickle down effect of not having a good credit rating.

Therefore it has come as a surprise to me there has been as much grand standing as there has been on such an issue. It is almost as both the Democrats and the Republicans are thinking arrogantly they can hold their stance and something will give, but I am afraid that something will be those who don’t have a lot to give anymore. Instead of worrying about the health and well being of the average citizen, they beat their chests and try to preserve their “moral higher-ground”. Ideally, you shouldn’t cut spending at a time of recession. It is silly. The best thing to do, for future generations as well, is encourage growth. It is good ole macro economics. No sense trading bullets for butter when what you really need to do is increase the supply curve outwards. That is investment in growth. The easiest, quickest way to invest in growth is spend money you don’t have. Is it a waste? Not really, because where does that Government money go? As long as you are playing fairly, it goes over a general spread across the US and foreign institutions that are willing to invest and employee US people.

Now, putting that aside for the moment, when the only way forward is to get an agreement with the Devil, then Obama has finally come to that point. He knows that an agreement, even a stupid one, is better than no agreement. He correctly realises that it is the thing that keeps the US in the game, even if it makes it a bit tougher (or improvement isn’t as quickly) it is a hell of a lot better than taking a step backwards. I think he also realises that at the end of the day, the Government will spend the money it needs to spend, so why waste all the time with the gnashing and wailing of teeth. The Republicans, who supported a President for 8 years who spent on special interests like it was going out of style and gave money back to people who didn’t need it without ever raising a finger, now arrogantly want their pound of flesh. Obama is going to give it to them, but for the bigger picture.

That is why it is truly very sad for the Democrats to start to break ranks. It would be far better for them to point out the idiocy and hypocrisy of the Republicans and support Obama saying that “he is making a deal with the Devil to save the average American from even worse things” than to role him under the bus. Democrats should be rallying around a hero, who is doing the only right thing the Republicans are allowing him to do. They should make him into a martyr for the cause, not a weak wesley villain.