The unthinkable has happened. Just when the US economy was regaining its health with a positive knock-on effect for world markets, the federal government irresponsibly shuts shop over a budget wrangle. Some 800,000 civil servants have been forced to take an extended unpaid holiday; essential staff has been ordered to keep working without pay, while national parks and museums are closed. America’s borders are now guarded by skeleton security crew and cancer drug trials have been halted.
Unlike the 2008 economic downturn, greedy banks cannot be blamed. I sympathise with government workers living from pay cheque to pay cheque, unable to pay their mortgages or car payments, but I blame the administration and Congress for holding its people’s welfare so cheap without a thought for the rest of the world.
The US dollar’s slide is infecting other currencies, while jittery bourses are experiencing volatility. The only winners are manufacturers of T-shirts emblazoned with messages lambasting those responsible for this mess. Americans are right to be angry. This is a man-engineered disaster that has arisen out of Republicans holding the nation hostage over Obamacare, that was passed into law almost four years ago but only came into effect on October 1.
The right wing’s rejection of a scheme allowing millions of Americans access to health care via government-subsidised insurance is hard for non-Americans to understand, especially those who look upon free health care as a basic human right. It is shocking that 48 million (15.4 per cent of the population) Americans are without health insurance. A 2012 survey found that 41 per cent of working-age adults (75 million) had difficulty paying medical bills with four million forced into bankruptcy.
There could be worse to come if this impasse between the Obama administration and House Republicans is not resolved soon. Congress needs to approve a lifting of the US debt ceiling by October 17, else send the US economy — and most others along with it — into free-fall. The US Treasury has announced that a failure to raise the ceiling could result in the US defaulting on its debts, leading to a financial crisis at par with 2008, if not worse — an analysis shared by the International Monetray Fund chief, Christine Lagarde, who says it is “mission critical” that a new debt ceiling is agreed.
“Critical” it might be, but will Republicans heed the call? President Barack Obama is concerned. On October 3, he told CBC’s John Harwood that the street should be worried about the “suicide caucus” of the House Republicans who may decline to lift the debt limit. There is plenty of blame to go around. Republicans are blackmailing the president to ditch or delay Obamacare, or else; Obama insists it stays and is not up for discussion. Neither side is negotiating eliciting accusations that the president and the Republican House Speaker John Boehner are behaving like kids squabbling over a football, except at stake are the lives of millions of Americans and millions more around the world.
Republicans bear the brunt of public condemnation. An ad created by the House Majority Political Action Committee shows a crying baby, narrated with the words “Speaker John Boehner didn’t get his way on shutting down health care reform. So, he’s shut down the government and hurt the economy.” Republicans hope voters have short memories.
If this is democracy at work, the same democracy Americans tout as the political Holy Grail to be emulated by other nations, they can keep it. A system that leaves a country in stagnation, without a budget and potentially unable to settle its debts is flawed. The credibility of the world’s economic powerhouse, that has traditionally dictated trends, has been shot — and the effects are being felt. Obama has cancelled his visits to the Asia-Pacific Economic Cooperation and East Asia summits, dominated by China, which is just as well. How can he advise on Asian economies when his own may go into its death throes? US talks with the European Union over a free-trade pact have also been embarrassingly postponed.
The buck stops with Obama; he is the man in charge. If this quagmire drags on, resulting in the worst case scenario, he will be seen as global enemy number one. On his watch, America has bled geopolitical influence. His efforts towards an Israeli-Palestinian peace agreement are a joke. His administration is detested by Egyptians of every political colour and the Saudi Foreign Minister, Saud Al Faisal, was driven to cancel his speech to the United Nations General Assembly in protest against the UN’s neglect of the UN’s inability to resolve the Palestinian issue “for over 60 years” and for taking Syria into a “dark tunnel of negotiations and procedures” to disarm Bashar Al Assad of chemical weapons, even as the civil war rages on. Between the lines, the disapproving Saudi stance is targeted at the US.
Obama must get his own house in order, not only for the sake of the American people, but also to retain his nation’s revered top slot in the global economic and geopolitical hierarchy before the world concludes the US is just an ageing tiger without teeth.
Khalaf Al Habtoor is a businessman and chairman of Al Habtoor Group.
