Saturday, June 4, 2011

The policy of the worst American Republicans

The U.S. debt crisis enters a dangerous phase. It paralyzes Washington, and, more importantly, it weighs on the economy in the United States. This could not be without consequence on global activity, particularly in Europe. For months the Congress - particularly the House of Representatives - can not agree on two key decisions: raising the ceiling on public debt, on the one hand, and a concerted plan to reduce the budget deficit, on the other.

On 18 April, already, this blockage led ratings agency Standard and Poor's to give a "negative outlook" on the note of long-term U.S. debt. This time, Moody's which, Thursday, June 2, launches a new warning: lack of agreement in Congress, the credit rating of the United States may be lowered.

Translated from the jargon of improbable rating agencies, this means that market confidence in the dollar starts to be a little shaken. There is no risk of default on sovereign debt American. But Congress is playing with fire. And the Republicans, who have the majority in the House, excellent in the role of apprentices arsonists! Since mid-May, the U.S.

public debt (accumulated deficits of the federal state) has reached the limit set by law: 14 294 billion - 99% of gross domestic product (GDP). Beyond this limit, established by Congress, Washington can no longer go into debt, thus function. The U.S. Treasury guarantees that he'll manage until August 2.

After he was threatened with default on some bond issues. Democrats and Republicans agree: we must raise the debt ceiling. But the Republicans put a condition: more cuts in public spending to fight against the budget deficit (more than 10% of GDP). This is pure demagogy. No serious economist imagines a long-term reduction of the abysmal U.S.

budget deficit without raising taxes, one way or another. President Barack Obama is ready to compromise. He faces a Republican Party that has made the tax a taboo and, under pressure from the movement Tea Party, a dogma of the reduction of the welfare state. The merits of the case is political.

Everything happens as if the Republicans campaigning for November 2012, playing the politics of the worst: over the economic situation is bad, they have more chance of winning the White House. However, the recovery is soft, the housing market collapses, the work is in poor condition. The behavior of the Republicans is all the more irresponsible they are themselves primarily responsible for the deterioration in public finances of the country.

They are the inventors of this amazing cocktail: more spending, including military, and still less in taxes ... Sorcerer's apprentice! Article published in the edition of 04.06.11

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