America's crumbling image: More debt ceiling debate fallout

The Congressional elections of 2010 was supposed to be about jobs. Jobs, jobs, jobs.

Instead, we got a retread of the culture wars – the usual assortment of favorites like abortion, gay marriage, border control and whatnot. Plus, there was some tea party protestations with the package, as a bonus.

But mostly, we got hard lines declaring that the only way we would resolve any looming debt crisis facing the nation would be by cutting government spending. We also got the rebranding of said spending: “entitlements.”

That language shift is important. After all, it’s easier for those of us slaving away every day to scorn and scoff at those who are plunging us into bottomless debt and think they’re owed something.  That can help sway public opinion, which pushes any public mandate into your corner, making it easier to mow down the opposition.

That brings us here to the close of July, less than a year later, teetering on the unthinkable – the downgraded credit of the triple-A rated United States of America, whose greenback has been world currency for longer than English has reigned as the official international language.

Raising the debt ceiling – something that has been done dozens of times through administrations led by both parties – was the easy work. Figuring out how to restructure spending would be the hard work. For some, that is. Others would just toss those without into the streets and figure it's a lick on them if they couldn't do better for themselves. 

If the debt ceiling debacle has been the easy lift, it's going to take more than Superman and the entire Justice League AND Hercules to heft the second half of the issue. For the record, no such superheroes roam the halls of the U.S. Congress. Not even in alter-ego form. Somebody's going to have to page them. And fast.

Both Moody’s and Standard & Poor’s have been sounding the bells. And in case folks have been tone deaf to that, the markets signaled their own alarm, with stocks slumping downward every day last week. That finally got House Speaker John Boehner and Senate Minority Leader Mitch McConnell to cede the president’s point, that default would be economically catastrophic for U.S. and world markets. There may be some eventual relief in sight, though slight. Late Sunday, there were yet more assurances that a deal was "close."

But Boehner and McConnell's admissions of reality was a that concession came too late in the process – after start-and-walk talks with the president, days, instead of months, prior to the U.S. Treasury's Aug. 2 deadline.

Meanwhile, the tea party faithful still declare that such deadlines are pure fiction, that it’s all an elaborate ruse put together by the Obama Administration. And if it’s not, it’s his fault for panicking the world, not their obstinacy when it came to compromising on a deal on the debt solution that would include revenue adjustments – i.e. higher taxes for some, closing of loopholes for others. 

It was a deal Boehner could not sell or seal with the president. Compromise, we've come to find in this process, is a four-letter word in certain GOP vernacular. Or a two-letter one: “No.”

Meanwhile, the Moody’s economics team of John Lonski and Ben Garber warned again of a potential oncoming double-dip recession. The confidence that many had anticipated would ease open wallets and hiring offices suddenly slammed down in the face of the political wrangling that hijacked Washington.

How delighted America’s enemies must be at this moment – watching the world’s greatest economic and military power devour itself in what amounts to the pettiest of bickering. How easy it will be to demolish the remains of our global moral authority since we've all but delivered the equivalent of a juiced-up shredder and unlimited vats of coffee.

The nation whose fingerprints are plastered over international monetary policy, whose lectures are nearly mandated the world over, walked the precipice of global credit default. And to top it, much of the antagonism arose with a faction that was discontented with the concept of paying to educate its next generation, protect its elders, or care for its infirm and indigent. These costs have been lumped under the title of “wasteful government spending.”

Better those dollars stay in individual pockets; best if it goes to coffers of corporate conglomerates.

The propaganda writes itself. It also removes America’s hagiography and puts a glaring spotlight on the wizard behind the curtain.  And at a time when tens of millions of young people in the Middle East, Europe and the Americas, North and South, are looking for leadership and models to emulate as they fashion political philosophy for the next century, we have failed them, as a nation. And that’s the truest tragedy of all.

The Debtor's Dance

With her staunch, power pantsuits and wonkish ways, few would have taken Hillary Clinton for a tap dancer.

Yet U.S. Secretary of State Clinton was doing approximately that in Asia earlier this week as the idiocy on Capitol Hill continued, careening us closer toward a completely unnecessary crash of confidence in America.

U.S. Secretary of State Hillary Clinton speaks in Hong Kong. Photo courtesy: CNN

Perhaps there's a conservative out there smiling, but it's hard to imagine any true patriots actually are.

Before a Hong Kong audience of investors and policymaker on Monday, Clinton deftly dodged any sense of panic about the tomfoolery that is the faux crisis of the debt ceiling debate. She danced about the obvious -- that so many legislators are intent on driving the economy off the cliff, both domestic and global, insistently so, because they are too busy denying that a default would mean anything.

These kind of lawmakers will castigate "greedy" homeowners for causing the housing bust, often pointing their fingers as lower-income folks who dared to grasp the American Dream via the detested Fannie Mae or Freddie Mac. When these homeowners default (and those middle-income people who snapped up jumbo loans to live large usually are excused from this), it's a sign of incompetence and irresponsibility.

Yet when the U.S. Congress OPTS to default on its standing obligations, be it paying its mortgages or checks to veterans , the logic is that it's a sign of principle. It's about stopping "spending" and ending debt.

Let's face it. Most people would love to end their debt by just not paying their notes on time, but banks don't take too kindly to that. The same is true in this case, where the ongoing threat of such stupidity is giving great pause to our bankers -- largely China. They are frowning deeply at U.S. political "recklessness" and acting -- downsizing their T-bill holdings and other investments, further weakening the dollar and our recovery.

Overseas, it's hard to fathom that this great nation, once admired for its generous nature and prudent stewardship, has allowed itself to be enslaved by a handful of tea-swilling, mission-blinded zealots.

Yes, the United States is on a negative slope when it comes to its fiscal house. But even the sober authors of the U.S. debt commission report stated that "budget cuts should start gradually so they don’t
interfere with the ongoing economic recovery." This isn't the time to insist on a bloody hacksaw job. But that kind of intolerant rigidity has been the demand of the Republican caucus, thwarting the deals to date.

It's this lack of coherence and compromise that has made ratings agencies, Wall Street and world investors uneasy. We just got out of a tumultuous economic period and have been settling into a jittery one. Now the U.S. House of Representatives, led by mistaken Republicans, are rumbling us back toward catastrophe.

Hillary Clinton is probably happy to be back stateside. Were she still traveling, as the Aug. 2 deadline to lift the debt ceiling looms and the deadlock ensues, she just may have worn out the taps on her shoes.