Obama needs to be decisive to avoid debt crisis relapse

The world can only hope that the past few weeks of Washingtonian legislative brinkmanship is the high watermark of the past few years of political polarisation in the United States.

The world can only hope that the past few weeks of Washingtonian legislative brinkmanship is the high watermark of the past few years of political polarisation in the United States. At the very least, it will mean the end of radical Republican attempts to sabotage President Barack Obama’s social agenda. Emerging economies like India would see a reflection of their political foibles in what the US has been going through in the past few months. In an India or a Brazil, the narrowness of the policy consensus among parties means that domestic political battles can often become intractable. This, however, shouldn’t be the case with a developed nation and especially one that is a superpower.

The recent crises over the raising of the debt ceiling and the failure to pass a budget revealed two clear problems in the US’ domestic politics. First, the aftermath of the sub-prime financial crisis has divided the Republican Party and meant the US no longer has a loyal opposition. Two, Mr Obama has a personal flaw: he combines an ambitious domestic agenda with a dislike for networking that a president has to do to further his political goals. Between these two, fratricidal politics is perhaps inevitable in Washington. However, the world cannot afford a US leadership which acts like a Third World nation. If the US had failed to raise its debt ceiling for a few months, the resulting chaos in the global financial system could have led to the coinage of a new phrase — a place where economies fall when they go beyond depression. What happened in Washington should not be dismissed as mere political theatricals, this was more akin to economic Russian roulette. The difference is that, in the latter case, the consequences when things go wrong can be fatal.