vendredi 18 octobre 2013

Breaking news : no US default for a federal reopening !

by Jean-Jacques COURTEY, Doctor in Economic Geography, Ph. D

The fateful date of October 17th for the US default has not been replaced by November 22nd, 2013, as it might have been expected on last friday 11th in the Congressial "roulette" initiated by the Tea Party (the most influent faction of the Republican Party in the House of Representatives).
In fact, after a complicated negociation process between Democrats (majoritarian in the Senate) and Republicans (majoritarian in the previous House), a compromise was made in extremis on October 16th.
The US Treasure is going to be allowed to borrow again above the present Debt ceiling ($ 16.772 trillion) till February 7th, 2014, and Federal services to reopen up to January 15th, 2014. In exchange a tax on insurances is abandoned by Democrats. Of course the Reid-McConnell plan (Democrat-Republican) written in the Senate had to be voted quickly by the two Rooms in the same terms.

The counter of the American public debt is working everyday speedily, with an average increase of  $ 1.82 billion a day since September 30th, 2012.
That debt appears in fact very paradoxical. As the USA are working more like an immense multinational, at the difference of most developped countries, the gain out of the Debt is also important : it amounts to an average of 89% of the US GDP a year, if you consider it from the American presence in the outside.
Almost all is thus compensated. And considered this way - a "half-belt" if taking again the metaphor of roulette -, it doesn't appear in the interest of America to stop this financial magic, even for the problematic vote of  the Obamacare reform : such a case is so difficult to understand in France.

It is very difficult to know if the ingenious multinational system is really born from the mind of the refugee and exiled Louis Charles Capet  (Louis XVII for  France, Versailles 1785 - Skelton Castle in UK 1794 - USA for a while) after the British success of the deceptive and ultra top secret "Operation Robin Hood" : it would have been imagined by him as a mean to restore his Capetian link and influence on France through the high discretion of business, initially. He never forgot  the answer of the fanatic Hébert (1757-1794) to his child question in the Temple jail (Paris) after the unconstitutional destitution of his father  Louis XVI (1754-1793) : "And now is the  French people happier with you ?" Hébert's hesitating answer was..."No !"  May be such a question must be avoided nowadays, as the answer would be similar : "No !"

The destiny of countries can be strange sometimes : some people prefer apparently "free" unhappiness to the more normal research of happiness, as long as they think a bit fast they have no sovereign !
America's worried creditors can breathe, and not the less : China, Japan, Russia, the Oil exporters countries (Saudi Arabia, Qatar,...), Brazil, India, but equalilly Switzerland and four EU countries (Ireland, UK, Belgium and Luxemburg).

The extremely unpopular "Shutdown" in the USA is not only questioning the daily functioning of the Federal public services in this vast country, but also the very basis of the Union, either a Federation...or just a return to the initial Confederation !

The Tea Party (created in 2008) has become a tremendous force of influence of the American Ultra-Right, beside being an important faction of the Great Old Party.
But the gigantic "Jumanji game" will probably start again in the beginning of next year : everything is just temporary and already questioning austerity policies in "virtuous" countries, potentially unlucky !