One of the great advantages of the American political system is its balance of power. No body is powerful enough to operate outside the scrutiny of other bodies. But one of the major disadvantages of the American political system is also the same balance of powers.
Congress is so balanced that hardly anything is acceptableThe executive is so tightly controlled that it hardly escapes the intervention of a federal judge, and the judiciary is so tightly controlled that there is always the possibility of appeals, which delays any final decision for decades.
something similar happens with Budget, Congress can approve a budget, which means it has the approval of the White House and both houses of Congress. But then again, that already approved budget necessarily cannot start, This is what has happened now.
Democrats approved a budget last year that once again increased the US public debt. Their argument is typically liberal (in the American sense of liberal): more public spending is needed to stimulate the economy and correct imbalances, and at the same time, tax the highest earners to obtain resources. grows.
But what happens is that the Democrats approved that budget last year when they had a majority in both houses of Congress, which are the House of Representatives and the Senate. Congressional elections have been held since then, and Republicans hold a majority in the House of Representatives. And that’s where they’re applying their balance of power.
Because in order to implement the spending items that Democrats approved last year, it turns out that states—the United States—have to borrow moneyThat means you have to increase your level of skepticism. And they already voted in favor of that loan when the budget was approved, but now it must be approved again.
And that is unacceptable to Republicans.
Trouble for Democrats and Republicans alike
What happens then that the government – ie the Biden administration – Runs out of liquidity to cover expenses Which is further, from civil servant salaries and pensions to health, education, defense expenditure or public debt interest payments.
In other words: either the government agrees with Republicans on a lower level of spending, or Republicans force the government to declare bankruptcy.
So it is an economic crisis that has an additional political dimension.
loss Republicans Are Divided Between the majority that would accept modest spending and tax cuts by the White House and, on the other hand, the Republican minority affiliated with the Freedom Caucus, close to Trump, and that demands a very substantial and unacceptable cut in the practice of democracy.
Not only that, that radical Republican minority is likely Force the removal of Republican leader Kevin McCarthy If he makes concessions that may be considered excessive.
If the country announces suspension of payments for the first time, it will not only Pay freeze for federal officers and pensions, but also an increase in interest on public debt, which, in turn, would lead to a depreciation of the dollar, an increase in unemployment, and a contraction of GDP. Overall, a remarkable step towards recession. I mean, a nightmare.
Most interestingly, this huge economic risk is particularly due to a political imbalance, which can only be corrected with one of the two parties giving in unexpectedly or at the last minute with an agreement. which today, no one knows where to start.