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Martin Wolfe Of The FT of London Warns That America Is Flirting With Self Destruction

Last updated: October 1, 2013 7:22 pm

America flirts with self-destruction

Martin WolfBy Martin Wolf

The fallout of a US government default, particularly one that lasts, is beyond prediction
Ingram Pinn illustration

Is the US a functioning democracy? This week legislators decided to shut down a swath of the federal government rather than allow an enacted health law go into operation at the agreed moment. They may go further; if they do not vote to raise the so-called “debt ceiling”, they risk triggering default on US government debt – a fate far worse than the shutdown or fiscal sequestration. If the opposition is prepared to inflict such damage on their own country, the restraint that makes democracy work has gone. Why has this happened? What might be the result? What should the president do?

The first question is the most perplexing. The Republicans are doing all of this in order to impede a modest improvement in the worst healthcare system of any high-income country. The Patient Protection and Affordable Care Act (known as “Obamacare”) is modelled on one introduced in 2006 in Massachusetts by then governor Mitt Romney. Its apparently criminal aims are to cover 32m uninsured people and ensure coverage of those with pre-existing conditions. True, the programme is complex. But it builds on a defective system. That most working people get insurance through their employers is an obstacle to labour market flexibility since it complicates decisions about leaving a job, particularly for people with chronic medical conditions. It is a form of serfdom.

US healthcare

US healthcare

Spending and outcomes, compared with other big high-income countries

Compare the US health system to those of the other large high-income countries. The US spends 18 per cent of its gross domestic product on health against 12 per cent in the next highest spender, France. The US public sector spends a higher share of GDP than those of Italy, the UK, Japan and Canada, though many people are left uncovered. US spending per head is almost 100 per cent more than in Canada and 150 per cent more than in the UK. What does the US get in return? Life expectancy at birth is the lowest of these countries, while infant mortality is the highest. Potential years of life lost by people under the age of 70 are also far higher. For males this must be partly due to violent deaths. But it is also true for women. (See charts.)

The idea that one should close the government – or risk a default – to stop universal insurance, which other high-income countries take for granted, seems mad. Maybe this shows how much some Republicans loath Barack Obama. Half of the legislators who called on John Boehner, the Republican speaker of the House of Representatives, to defund the health law come from the old south. Its dislike of the federal government may be part of the explanation. Republicans might fear not that the programme will fail, but that it will work, cementing the credibility of government.

So what happens now? Shutdowns are relatively predictable. They have also happened before. Goldman Sachs notes that “the longest shutdown equivalent to the current situation occurred in 1995 and lasted five days”. Goldman estimates that about 800,000 federal employees will be put on furlough. Only activities funded by the specific route of congressional appropriations – about one-third of federal spending – will be affected; a little over half the activities within that category are likely to be exempt. In areas not exempt, employee salaries would be cancelled during the shutdown, but most procurement of goods and services would subsequently be made good. Yet this will still be a nuisance. Thus most analysts assume the shutdown will not last very long. Goldman estimates that a two-day shutdown would reduce growth in the fourth quarter by 0.1 percentage points at an annualised rate, while a week-long shutdown would cost 0.3 percentage points.

Now consider the debt ceiling. According to Goldman, without an increase in the ceiling, the Treasury would no longer be able to issue debt from October 17 and would deplete its cash by the end of the month. Much confusion exists about what would happen if the Treasury ran out of cash and could not increase its outstanding debt. The optimistic view is that it could meet its priorities, including debt service, by managing its payments. If so, no default need occur. Jack Balkin of Yale Universityargues just this. The pessimistic view is that managing its cash flows in such a way would be illegal and possibly impossible – not least because cash receipts fluctuate substantially. But the Treasury, playing a game of chicken, would argue the pessimistic case even if it believed it could cope.

At best, a failure to raise the debt ceiling would necessitate a sharp cut in spending. At worst, the US would default. Analysts at Bank of America Merrill Lynch argue that hitting the ceiling would require the US to balance its budget at once, cutting spending by about 20 per cent, or 4 per cent of GDP. That would push the US into another recession – even if there were no default. The consequences of an actual default, particularly one that lasted for some time, are beyond prediction. Unlike a shutdown, there is no precedent, for good reason. The notion is suicidal.

So what should the administration do? In a democracy, people overturn laws by winning elections, not by threatening the closure of government or even an outright default. It is impossible to run the government of a serious country under blackmail threats of this kind. Every time the administration gives in, it stores up more difficulty for itself. It has to stop doing so. Some argue that the 14th amendment of the constitution, which states that “the validity of the public debt of the United States, authorized by law … shall not be questioned”, gives the president the power he needs to borrow, in order to redeem debt. But such a presidential action would be risky. The Supreme Court might side with the president, but a constitutional crisis could itself impair US ability to borrow on favourable terms. Again, the clever proposal to mint a trillion-dollar coin and use that as security at the Federal Reserve might also cause mayhem.

Playing chicken with credibly reckless people is always scary. But the administration cannot give in. I remain, like Winston Churchill, optimistic: the US will do the right thing in the end, though not before first exhausting all the alternatives.

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  1. ReportJoeDaWealthManager | October 2 11:12am | Permalink

    Not a bad missive from a Brit overseas…but a few points he overlooks are worth mentioning:
    1. The US system of democracy purposely gave the purse strings to fund the gov’t to the House, not the Senate or the President; call it a balance of power if you will. Obama has rung up 6 trillion in new debt or more since taking office and we have no real results: 50 million on food stamps? There’s progress! Job creation has been stymied because of his failed policies.
    2. only 20% of the federal employees will be furloughed. They even did get together to pass a law allowing active military to be paid. How nice since retired generals still get their pensions.
    3. ACA, aka, Obamacare, has way too many flaws, is ill conceived in many respects, and is NOT ready and they admit it. A delay for 1 year is the best action, rather than wasting billions to later admit it was wrong to bring a new product to market prematurely. Business 101!
    4. 32 million uninsured will never be covered: over 25 states refused to expand Medicaid to do so. Why? Because the feds only said they’d pay most of it for 4 years and then the states are on their own. States would face massive tax increases since most have a balanced budget requirement by 2018.
    5. Your “serfdom” comment is baloney: employees change all the time to new employers without any pre-existing condition issue. Most states require even small businesses ( greater than 5 or 10 employees) to cover them as well.
    6. The key flaw in Obamacare is the lie perpetrated by the Whitehouse and the Senate dems that you can keep your insurance if you like it, you can get coverage for less than your monthly cell phone bill, etc…the reality, now that the emperor is wearing no clothes is that costs are going up 100% for most young people, under age 40, and in some cases 300%. Why? Because young people are being played as fools and their rates are loaded to subsidize the rates for old blokes. They are crying sticker shock already!
    7. Lastly, the feds already run Medicare and it costs 10X more than promised when Americans were duped into it during Lyndon Johnson”s “Great Society” welfare state black hole creation in the ’60’s. If the feds could competently run anything, more Americans would support ACA. Look at our postal service: obsoleted by the internet and Fedex and UPS.
    Most of us know what the ultimate cost of this charade will be: extremely high costs for healthcare and little access with long waits. Why do rich Canadians come to the US for critical care? Rhetorical question!
    In the end, why should a whole generation of young Americans pay for something they do not need or want? Few males under 35 ever see a doctor. Now being told to pay $300-400/month for health insurance, in the worst states, is crazy. Oh, and I almost forgot: the exchanges are not ready and the income test for the tax subsidy to afford it is not working so they will use an honor system in year 1! LOL! Remember liar loans and stated income loans from the housing bubble? Even big labor has turned on Obama and his minions! Now that they finally read it after Pelosi said. “We have to pass it so we can read it and see what’s in it!”

  2. ReportMoogle | October 2 11:09am | Permalink

    @ babylon

    I think public misinformation is playing quite well to GOP’s hand. If there is one thing the administration should do to help their case is to present concisely what the ACA is. I think the Internet and biased media played a great role in the misinformation.

    It is not that I am specifically pro-Democrat, as I am especially alarmed by the allegations by Snowden and what the Obama administration knows about that. There is more juice in complaining Obama being Winston Smith’s nemesis and Google’s buddy then in complaining Obama flirting Marx and Lenin.

  3. ReportSpeedbird1 | October 2 11:09am | Permalink

    Martin, you have lost me. YOU are off the rails. Perhaps you should re-read Milton Friedman’s, FREE TO CHOOSE. From the introduction: “Experience should teach us to be most on our guard to protect liberty when the government’s purposes are beneficial. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greater dangers to liberty lurk in in insidious encroachment by men of zeal, well-meaning but without understanding.” Justice Louis Brandeis, Olmstead v. United States, 277 US 479 (1928)

  4. Reportbabylon | October 2 10:46am | Permalink

    @Kevin A

    “Obamacare is socialist/communist”!! Enlightenment! Now we see the light. As the article points out: so was the Massachusetts health provision (but Republicans were not in arms over that one); so is healthcare in other advanced countries and their (democratic) citizens are not in arms over it. The very idea that everyone should be responsible only for their own needs goes so completely against the ideas of community and republic and democracy and even christian values (values republicans are always crowing about) that it’s difficult to even believe a reasoning brain can’t grasp what’s in front its own nose. And lest you forget defense spending is also socialist/communist. Republicans are all in favour of that, nevertheless.

    There’s a brilliant Youtube video of Jimmy Kimmel on the streets of America asking people if they preferred the Affordable Care Act to Obamacare. [Obviosuly it’s TV]. They were against Obamacare but wanted, wanted, wanted the Affordable Care Act. That’s the level and quality of understanding amongst rank-and-file republicans. Zero. Its a tragedy for the rest of us in the West. Having built our expectations on the rationality and level-headedness of America to now be confronted with this gorgon. The silver lining is that Europe may finally awaken to the fact that leaning solely on Uncle Sam is not a smart strategy.

  5. ReportYorkie | October 2 10:44am | Permalink

    An excellent article Mr Wolf, and more solid points made in response to the more reactionary comments above. If the American public need an easier analogy, it is this – in any other developed nation, Breaking Bad would have consisted of a 5 minute episode during which a hard working citizen is diagnosed with cancer, and then recieves state supported medical treatment for the condition.

    The popularity of the show makes clear that worldwide people, thinking rationally, feel that the lead character is inherently unfairly treated, and is therefore somehow ethically justified in turning to a life of increasing criminal activity to fund his treatment. The simple fact is that even the toothless reform of Obamacare would prevent this from being mirrored in reality.

  6. ReportAge Olav Mariussen | October 2 10:44am | Permalink

    We all know that fundamentalists weather they come from Afghanistan or the US South, can go into self-destructive actions. A default is a real threat. Martin, you say “beyond prediction”. You can do better than that. What would happen in case of a US default that last for some time? What are the implications for the global economy?

  7. ReportMysterion | October 2 10:33am | Permalink

    @Kevin Alexanderman – its advisable to read an article before commenting on it. Otherwise one is liable to make oneself look foolish.

  8. ReportObadiah | October 2 10:23am | Permalink

    doylejustin [7:13am]– “I have heard that some hospital systems are planning for 20% cut in revenues in the next 10 years because they will have to compete and deliver better performance for less cost.” Sir, I am confused. Your post suggests this would be a bad thing? I’m skeptical that the ACA will deliver this result, but if it did lead to more competition and ‘better performance for less cost’ that would be great!

  9. ReportRDRAVID | October 2 10:21am | Permalink

    Agree that the US health system is among the most expensive and worst in the world, but Obamacare in forcing the lower middle class to purchase health insurance will cause hardship for many too. For example a small businessman with a family of 4 earning $60,000 income will be forced to pay $10,000. It should be for the individual to choose if they want health insurance or are willing to take a risk or pay any expenses from their savings instead. If the government thinks people must have health insurance it should be funded out of general taxation.

    Regarding the debt ceiling, the US fiscal deficit is less than 4% of GDP now, spending is running 15% ahead of tax revenues. Tax revenues are easily enough to cover the debt interest, and in the debt ceiling law payment of debt interest is senior to other government spending. Therefore if the US were to default it would be completely Obama’s decision, it would be illegal and could be challenged by bond holders ultimately leading to the impeachment of Obama. Obama is sensible enough not to do this, the US teasury will just cut spending by 4% and honour its debt. If you look at financial market reaction this is the possibility that is being factored in equity markets are pulling back & bond prices rising the typical reaction when growth expectations are declining.

  10. ReportKevin Alexanderman | October 2 10:07am | Permalink

    Forcing everyone to pay for insurance from someone is a lot better than establishing a government-run bureaucracy.

    It is already the way it works for automobile insurance.

    Requiring individuals to be responsible for their potential accidents or ailments is ensuring that others do not have to foot the bill. As I understand it, Obamacare is pretty much a socialist/communist solution.

  11. ReportMoogle | October 2 10:01am | Permalink

    @Kevin Alexanderman
    The problem is that some people are denied any insurance. It is not because they do not want to buy them, but it is no one will sell to them because of existing ailments. People will not buy insurance when they think they need it. By the time they think they need it, it is too late. It is hard to blame the insurers themselves, who would sell a policy to high risk individual. It is only rational for insurers to refuse to do so, as insurers themselves are a for-profit business.

    The only alternative, as Romney implemented, is to force everyone to buy at the beginning REGARDLESS of current health conditions. That is people with and without existing ailments all have to pay, and the for-profit insurers still get their premiums.

  12. ReportMoogle | October 2 9:54am | Permalink

    @ RJB73
    How I see infant mortality is more like a measure of the bang of buck we are getting for healthcare. US spends the most GDP per capita for healthcare in an advanced developed nation/region (this info is quoted in the article).

  13. ReportKevin Alexanderman | October 2 9:39am | Permalink

    Mr. Wolf,
    You are evading the reality that if the US does not get its financials in order, it will default as any other country. They are already printing money to finance their government–something they are likely unable to stop.

    You mention “32m uninsured people”. Why don’t they buy health insurance–it is not so expensive? I do, and am happy with the options available here in the UK. I can understand a society seeking to solve the problem of those with pre-existing conditions, but that is hardly a reason to communize health care.

    With all the talk of the uninsured, there is little discussion of the rights of doctors. Government health care effectively minimizes private practice, because the former is free, and those who have to earn their revenue in free market–always the best providers of goods and services–can not compete.

    Of course you know this, as it has been demonstrated in every other instance of government monopoly.

  14. ReportEden de Vizes | October 2 9:12am | Permalink

    For those of you who have not already done so, I suggest you read the NYT’s excellent Editorial Board leader this morning. John Boehner’s leadership has been incompetent and disgraceful and we may at least hope that the inexcusable behaviour of the Tea Party members of the House (come back, Mad Hatter, all is forgiven!) may lead to a terminal decline for this utterly risible sect.

  15. ReportVasilis T. | October 2 9:09am | Permalink

    If nothing else, Republicans that worry whether the US turns into greece should look into figure 7 of this report: “Private health expenditure … constituted 38.4% over total health spending in 2010 while the average of the EU-OECD countries was 18.4% in 2010. Greece has the largest share of private health expenditure among EU countries of OECD. http://www.euroban…ov%2015%202012.pdf

  16. ReportRJB73 | October 2 9:00am | Permalink

    I’m not an expert, but I did hear an ‘expert’ discussthe US healthcare system on an EconTalk podcast, (Scott Atlas, Senior Fellow at Stanford University’s Hoover Institution) noted that comparing healthcare systems based on infant mortality and life exectancy is not neceassarily appropriate. For example, infant mortality is measured quite differently across countries, and mortality can be impacted by factors not related to the healthcare system itself e.g. car accidents and other violent “ends”. Looking at cancer survival rates and waiting times, the US does pretty well

  17. ReportChairmanChand | October 2 8:50am | Permalink

    @John Bloom. Completely agree with you.

    The huge profits made by drugs companies, doctors and surgeons in the USA is the root cause of the problem!

  18. Reportsenior muppet | October 2 8:46am | Permalink

    JamesCW,after Mao the health provision was privatized with the usual disastrous results,crumbling of rural coverage,many poor left without proper coverage-bit like the US actually

  19. ReportChairmanChand | October 2 8:45am | Permalink

    Another absolutely brilliant article by Martin Wolf! Objective, succinct and excellent analysis. The Republicans are very poor losers, spoilt children, anachronistic and totally out of touch with mainstream USA. Send Tea Party to Guantanamo for “un American” activities?

  20. ReportKamizaki | October 2 8:43am | Permalink

    This is no longer a system of checks and balances: whoever writes the checks, gets away with it. Follow the money…

  21. Reportpraxis22 | October 2 8:38am | Permalink

    Ah, the 14th amendment, by hook or by crook…

  22. ReportEx big 4 long time Partner | October 2 8:05am | Permalink

    I agree with CharlesD – I’m absolutely sick & tired of this topic.

    Completely over done and over covered. Even Martin is in the game. Nothing, absolutely nothing dramatic is going to happen ….. so it’s not worth covering in any depth! I suspect that “vested interests” are at play hoping for some wins on short positions, etc…. and that is rather sick!

  23. ReportBRR | October 2 8:02am | Permalink

    The US system is one of checks and balances. Normally this is designed to check an over-powerful executive. This time it is to check an irresponsible legislature. Obama should say no and do whatever it takes. Yes he can. The judiciary would be equally irresponsible to check him and not Congress.

  24. ReportRichard Straub | October 2 8:02am | Permalink

    Excellent article taking the high ground and putting things in perspective. Thank you Martin Wolf. It would be good though if President Obama would give a perspective as to how to fix the healthcare system as such in the long term. It is a hpyercomplex and convoluted system that delivers dramatic under-performance. This would require a new approach from the management perspective i.e. reorganizing it step by step by piloting and testing better approaches. The Government hire companies like IDEO to design gradually a better system. It is not only a political issue but a management issue.

  25. ReportJames CW | October 2 7:38am | Permalink

    @ senior muppet.
    And there were how many rich to be shorn in Mao’ s China, not many and they would have long marched off to Taiwan ? What about it “being glorious to get rich”, seems they switched policy in time to get where they are today thanks to Deng Xiaoping.

  26. ReportCharlesD | October 2 7:38am | Permalink

    Mr. Wolf, go out and have a cup of coffee, relax…..maybe take a walk in Hyde Park and watch the ducks swim about…..things will be OK…..

  27. ReportNouser | October 2 7:31am | Permalink

    the united states is just that: remember an “american” is a citizen of his state, not of the union of states. most things are best left to the individual states, not the federal government.

  28. ReportJohn Bloom | October 2 7:28am | Permalink

    “In a democracy, people overturn laws by winning elections. It is impossible to run the government of a serious country under blackmail threats . Every time the administration gives in, it stores up more difficulty for itself. It has to stop doing so.”

    Personally I would arrest all the Tea Party activists and imprison them for terrorist offences. It’s clear as you say that they have no respect for the Rule of Law and seek to subvert democratic government by illegitimate threats. A diet of stale prison bread and fetid water for 20 years might help them see sense. Lock them up now.

  29. Reportdoylejustin | October 2 7:13am | Permalink

    I am a big fan of yours but this article was a waste of space. We american haven’t had a civil war in 150 years so it is about time to go at it again. I would prefer you write about what happens if Obamacare actually succeeds. I have heard that some hospital systems are planning for 20% cut in revenues in the next 10 years because they will have to compete and deliver better performance for less cost. I think think would have a profound affect on all markets starting with US government budget deficit and US treasury market. I think Obamacare (as flawed as it is) is the beginning of the end of the dysfunstional Health care system.

  30. ReportNorodnik | October 2 7:04am | Permalink

    How about some massive cuts to military procurements — I’m sure 4% of the GDP could be found in a flash, and the sweet justice would be that most of the “old south” is on a drip line of Pentagon largesse…

  31. Reportknys2011 | October 2 6:57am | Permalink

    Oh, so being able to print your own money doesn’t necessarily mean that there is no risk of default – how about that, then?

    Dysfunctional “democracy” at work at the last Tea Party, with a bit of luck?

  32. Reportsenior muppet | October 2 6:48am | Permalink

    Just one or two facts about China under Mao.Life expectancy doubled from 32 to 65.By 1975 infant mortality rates were lower in Shanghai than NYC.Literacy rates rose from 15% to 80%.This was, of course,
    not from foreign investment but by redistribution of resources from the rich to the poor.

  33. Reportsenior muppet | October 2 6:35am | Permalink

    Apparently it costs $160000 to have a hip replacement in the US.In France it is free and virtually immediate.
    Even going privately the cost is about 12000 euros.The problem in the US is that every provider is profit driven.

  34. ReportE. Scrooge | October 2 6:33am | Permalink

    The US healthcare system, paying top dollar for bottom shelf service. But, if you cannot afford to pay the top dollar, and make too much to qualify for public assistance, heal thyself, because you are facing personal bankruptcy otherwise in order to pay for the costs.

  35. ReportLa Bergerie | October 2 6:25am | Permalink

    Clearly Martin Wolf has never had any personal experience with either the U.S. or Canadian healthcare systems. In this case his beloved statistics don’t show the human reality of the situation. As long as you’re not seriously ill or in need of medical attention the Canadian system is better. They’re particularly good at treating frostbite, albeit there’s a ten month waiting list.

  36. Reportgareth davies | October 2 5:39am | Permalink

    America has already been destroyed by Wall Street – US incomes are no higher than 1989. The elites have enriched themselves at the expense of those that facilitated wealth creation through political stability and accountable institutions.

    Let them eat cake

  37. ReportJames CW | October 2 5:22am | Permalink

    I read a lot of comments in the FT. Today the comments on the US shut down display more intemperate language and anger than I remember reading before. Perhaps this is a refection of the emotion in Washington and a hint that this shut down’s outcome will be different from previous versions.
    Perhaps it is worth pointing out that Obama’s ultimate responsibility is to the people he serves and not to a particular piece of legislation. He has to negotiate in order to minimise damage. It is his job.

  38. ReportGeorge Harris | October 2 5:08am | Permalink

    um….rockyusa ….”Canadians cross the border in droves rather than wait months for cancer treatments, MRIs, CAT scans, and needed surgeries. Many of the best most advanced drugs aren’t legally sold in Canada and have to be obtained elsewhere” wow! did you see that on Foxnews? It is interesting that 92%.(minimum in all national polls..please google) of Canadians want to keep our wonderful health care system. Of course we are all getting older and want our new free hips tomorrow . My 11 month wait was painful…but it sure works well now. Congratulations on Obamacare!.

  39. ReportGeorge Harris | October 2 4:36am | Permalink

    “the US system is certainly no worse than any healthcare system ever put in place by countries that call themselves socialist. In any socialist country, from the former USSR to China to say Cuba and Venezuela”…Amazing to think the American health care system is no worse than Cuba. If you have insurance it is better but if you are one of the 32 million uninsured, I would suggest a trip to Cuba if you are seriously ill.

  40. ReportJerryjb | October 2 4:25am | Permalink

    Perhaps Americans need to free their businesses of paying for health care. Would Americans pay higher individual taxes for heath care? They probably would not considering that most Americans seem to be adverse to paying higher taxes for anything. I suspect that the majority of Americans are loath to change because they feel that they have a pretty good deal now.

  41. Reportluctoretemergo | October 2 4:04am | Permalink

    Martin Wolf [@ 10:21]

    So then the US system is certainly no worse than any healthcare system ever put in place by countries that call themselves socialist. In any socialist country, from the former USSR to China to say Cuba and Venezuela, anyone within the Party Nomenclatura gets proper treatment. The rest gets something else.

    In Canada, N.B. the envy of the US Left, this system persists. Based on the Tommy Douglas socialist notions that infused the federal healthcare act of the 1960s that blue collar workers are the mainstay of the economy, blue collar workers, through Worker’s Compensation, get preferential treatment and jump the cue, compared to anyone else.

    My suggestion to you and other commentators, is to keep an eye on the very real effect of Obamacare on the structure of employment in the US. Based on what is transpiring, it is having the pernicious effect of employers transforming traditional full time jobs into part time sub-40 hour jobs in order to escape the burdens imposed on employers by Obamacare. That’s a reality check.

  42. ReportXRayD | October 2 3:45am | Permalink

    There are “some people” who don’t want “some other people” to have anything through politics because in their opinion they don’t deserve it, and only people like themselves or those who aspire to be are “entitled” to things because to them only they are real Americans! Take your pick, member of congress, banker, real estate developer, pharmaceutical ceo, farmer, teenager, geezer, black person, hispanic, immigrant, union worker, president of the other party, etc. etc.

    Let us be thankful that we have a political system that is now a circus with clowns, elephants and asses, instead of the systems that exist in Lebanon, Egypt, or Syria to sort it all out – so far!

    But with our 2nd Amendment “remedies”, who knows?

  43. ReportBenjamin Taylor | October 2 3:19am | Permalink

    Lyndon Johnson, dear Mr. Wolf, not “Lindon” Johnson.

    Let’s at least first correctly spell the name of the US President whose policies we so passionately endorse and defend, shall we?

  44. Reportdh from texas | October 2 3:19am | Permalink

    This is the best piece on the US debt limit crisis I’ve seen anywhere. Depressing, but it’s better to see the truth of the situation clearly, as Mr. Wolf does.

  45. ReportRDD | October 2 2:56am | Permalink

    Boehnerhead and pals at it again.

  46. ReportJGalt | October 2 2:17am | Permalink


    Well said

  47. ReportRicheightyeight | October 2 1:55am | Permalink

    Morons for sure, but mostly really dangerous ideologues. There is no alternative but to stand up to these extremists, even if it risks taking down the global economy. The US constitutional system is showing its age, with the famous checks and balaces eroded away by the power of unfettered special interests. Well, the clash has been inevitable for some time; it may as well happen now.

  48. Reportjag269 | October 2 1:41am | Permalink

    Sorry, they are morons, whatever what one might think of their own policies, if they have one on healthcare (except the insane and unsustainable “business-as-usual” if you’ve been near an emergency room recently)? This behavior is moronic. Period.

  49. ReportLes Harvey | October 2 1:38am | Permalink

    Agree with Martin, if the Reps win this that’s the end of democracy, ie having to accept that I won’t always get my way. What are the Reps thinking?

  50. Reportforgottenpoliticalcenter | October 2 1:34am | Permalink

    as i read this article, I am once again amazed that many Europeans have ridiculously strong view on US politics yet fundamentally misunderstand the US political system.

    So a bit of a civics lesson. The US is governed based on the principle of DIVIDED gov’t. As a rule, we distrust central authority (some guy named George was the last straw) Not only do we divide the federal gov’t between the Executive, Legislative and Judicial branches, we also divide authority between the Feds and states. And within the states, authority is further broken down between state, and various local county and/or municipal gov’ts. In addition to that, this authority has always been designed to balanced will of the population vs. the will of different regions. Even 250 years ago, the rural folks didn’t trust those in the east coast cities.

    America is a big place and thus life much different between the coasts and the “fly over” country. People believe in different things. The folks who live close together have view that are pretty much the same as those in Europe (who coincidentally also live very close together) However, there are a lot of people in the vast spaces. And by the way, these are the areas with growing populations. Generally they don’t want someone up to 2000 miles away telling them how to live their lives or spend their money. That is probably how they choose live where few others do.

    In terms of daily life, the federal gov’t has the least impact of all the branches. And if you don’t like the way your local or state of gov’t does things you can either vote to change them or move to a place that more suits the style of gov’t you like. And if you have ever seen a map of voting patterns you will see that the country is pretty much split into lots of red with small (but highly populated) blue areas. The only people that federal gov’t really does impact are those in the military, folks in Washington DC or those who get some sort of gov’t check. Don’t say infrastructure because that is done by local or state gov’t albeit with the feds holding the funding (which they collected from gasoline sales tax) so they can retain control over the system.

    So before you call them idiots or morons, consider the possibility that they might have different experience than you. That goes to both sides. In the end the Congress is generally representative of the people : 2 groups with very different lives and very different views on how they want to be governed. Thus we have stalemate. And this is unlikely to change any time soon.

  51. ReportPercy Street | October 2 1:30am | Permalink

    Reading these comments is an odd experience. Is the US a functioning democracy? Well, it doesn’t function very well. The Tea Partiers (just as a short hand) sense as much, but don’t really understand how it does or is supposed to work, are frustrated and angry and–this is perhaps the key–seem to have very little to propose. (For example, should there be a rebalancing from federalist centralism back to the states? How? What would it look like?) They are not helped by the GOP: very big business, having become global, has moved off shore for low tax purposes (and the better to out compete mere national players) and has lost political interest. And the Republican (Nixon’s) turn to the South plus Reaganite economic individualism has degenerated into a rather nasty populism.

    The result is some fantasy about a prior condition, when things were right, a status quo ante, before Obama, before . . . before what? Perhaps this prior condition is contained in the constitution, in the founders’ intentions; and the economy–if only government would just keep out of it–would work of itself. (But then how did we get to what is? A sort of fall from grace?)

    My own view is that there are no real grounds for much optimism. The US has promised so much, the reality is so discordant, that delusion sets in. Perhaps the central event of US history is the civil war. Is it being celebrated? Could it be? Then remember that there are monuments to the Confederate dead.

  52. ReportHowdy_Tex | October 2 1:07am | Permalink

    I want to thank Martin Wolf not only for this well-argued editorial, but also for taking the time to address one of the particularly inane posters below. Thank you!

  53. ReportJGalt | October 2 12:41am | Permalink

    I stand corrected Bob Woodward wrote “The Price of Politics” – another very well written book about Obama’s inability to lead

  54. ReportKris Chari | October 2 12:39am | Permalink

    The days of constructive republicans who made US a great Nations are left behind. The Current Republican Party is guided by 1% for the 1% and they have only one addenda. Be negative on anything coming from President and /or democrats.

  55. ReportPEMF | October 2 12:09am | Permalink

    Perhaps the Tea Party is a branch of Al Qaeda? Their adherents seem to share the same objective – to destroy the United States. Home-grown terrorism indeed.

  56. ReportPAUL A MYERS | October 2 12:07am | Permalink

    Arguably, Ronald Reagan was the most politically successful Republican of modern times. He was sunny, optimistic, and basically cooperative. He worked well with Democrats in the late 1960s and early 1970s building out California, contributing to long-lasting success. While president, Reagan presided over the Grand Compromise resulting in the expansion of the modern Social Security system. He achieved the last major bi-partisan tax reform bill in 1986 and an immigration bill. Lot’s of positives, lots of optimism.

    In contrast, the Congressional Republicans are a dark lot with an unprecedented record of negativism and obstruction while being the worst kind of special interest toadies. But it’s mostly that dark, pessimistic, obstructionist image that they are casting over the broad public perception of what the Republican party stands for and more ominously where it might be going. They are creating a perception that they are a group of people who cannot get along in a modern and changing world.

    Where are the Republicans going? Most likely to the same place the California Republican party has already arrived at: deep in the minority, unable to attract and fund candidates with public appeal, an angry group sitting over at the far side of the legislative chamber mumbling “no” to the public business, ignored by voters.

    Right now the Republican party is too strong, but after a couple election cycles, they will probably be too weak; not a credible minority, simply irrelevant.

  57. ReportAW – California | October 2 12:01am | Permalink


    “The Amateur” was not written by Bob Woodward. It was written by Edward Klein. But then again, when has the truth ever mattered to the tea baggers?

  58. ReportJ Richard | October 1 11:59pm | Permalink

    You lost so go take a look in the mirror. Quit acting like a spoiled kid attacking Martin Wolf and Barack Obama. That tactic isn’t working so try something else. If you don’t want healthcare then don’t go to the Doctor.

  59. ReportJonaz | October 1 11:56pm | Permalink

    It is a huge (and very common) mistake to compare a household economy with a nation´s economy. Within a nation, your spending is my revenue, not so in a household.

  60. ReportJGalt | October 1 11:37pm | Permalink


    Your perspective is often tainted because you see issues from the left.

    In your article you go on about the high cost of healthcare in the US. But Obamacare will not reduce the high costs – all it does it reallocate the high costs for others to pay. And the way it does this is complicated, inefficient and at odds with other economic goals. For example, by mandating that all companies with more than 50 fulltime employees must provide health care to their employees, those companies have now changed their hiring practices so that many employees are not allowed to work more than 29 hours a week – and be called full time employees. This is probably why the number of part time workers in the US has increased dramatically. There are many other unintended consequences of this bad legislation – which I doubt you have ever read. Or have you?? It is 33,000 pages long.

    You would have us believe that the US government shutdown can be blamed on the “Tea Party” Republicans – but the reality is that it is Obama and his inability to negotiate and legislate (he can’t even get his own Democratic Senators to support his proposed gun legislation) that has caused this crisis. In Bob Woodward’s book “The Amateur” he lists Obama failures to govern and his disregard for the normal give and take of Washington. (If Obama was a CEO he would have been tossed out long ago for his failure to lead.) The Congressmen were elected too and Congress is doing its job by being a check and balance to bad legislation. Your argument that Obama should get his way because he won the election is ignorant of the US system of democracy.

    You supported Obama’s election – and now you have to live with the outcome. History will regard him as one of the worst Presidents ever. Bad judgement and even worse leadership.

  61. ReportPaul Munton | October 1 11:22pm | Permalink

    The really interesting thing about the US is that it is a substantially Christian country with a majority of practicing Christians. The second part of the golden rule is that Christians are expected to “love their neigbours as themselves”. This might reasonably include helping ensure their neigbour has reasonable health care and does not face bankruptcy when his wife gets cancer. Yet this does not seem to be part of Christian US thinking, especially on what is known as the “Christian Right”. Perhaps a US citizen can explain this to a British subject who lives in an essentially secular society but has a rather supportive and good value health system?

  62. ReportSchwarzhund | October 1 11:21pm | Permalink

    SuperChief – to extend your analogy the problem seems to be that a small proportion of credit card holders (the extremely wealthy) don’t want to pick up the tab and think the little people should pay or better still suffer from no health coverage. It is not like they are spending money on having a party or anything. I do agree that the healthcare system in the USA is a disaster – just check out the comparative cost and life expectancy data, but this is not the result of government incompetence but a system that seems to milk the government and line the pockets of the drug industry and health care corporations. The rest of us just wonder what kind of society thinks it is ok for a significant portion of society to be left without care and for reduced life expectancy to be a positive in support of a regressive tax system.

  63. ReportAW – California | October 1 11:17pm | Permalink

    Dear Martin Wolf,

    great column. What is beyond me is why are you even trying to argue with the tea party crowd a la Rockyusa?

  64. ReportJ Richard | October 1 11:13pm | Permalink

    I grew up on a farm and we had to herd animals into a pen, barn, field, before we called the truck and sent them to a slaughterhouse. The overweight old white GOP has let themselves be herded into a pen and don’t realize Harry Reid and Barack Obama are backing the truck up. Are the American people going to come to their aid? The Tea Party will let them hang out to dry and find someone else to back in the next election. John Boehner has let himself stoop to an 8 year old by mocking Obama, but the cynic in me says Obama knew he was baiting Boehner. Boehner took the bait and now is a 63 year old laughingstock.
    on front page news. Maybe Boehner will defund the Supreme Court because he didn’t get his way. John Roberts might not be amused.The only thing missing is one of those funny hats the Tea Party used to wear..What a way for his kids and grandkids to remember him by.They will remember the Afforabl Health care act though.

  65. ReportPoorRicardo | October 1 10:50pm | Permalink

    A pleasingly direct and well-written article. Bravo Martin Wolf.

  66. ReportSuperChief | October 1 10:46pm | Permalink

    I would expect a more honest analysis of the real issue from the FT. The notion that this is about holding the healthcare law hostage is simple minded and incomplete. The issue is about reckless government spending and accountability.

    I offer an over-simplified analogy to complement Mr. Wolf’s over-simplified analysis. Your spouse has, for many months, spent too much money on the joint credit card. Despite your best efforts to work through the problem, she (I am not discriminating) refuses to grasp the importance of living within ones means and not going broke. Your credit score has taken a hit and the standard of living that you are able to afford has eroded.

    You finally put your foot down and tell her that if she doesn’t come up with a clear plan to correct this problem in two months, you are not allowing her to go away for the weekend with her friends. She doesn’t listen, and on the eve of her trip you take her credit card away. Martin Wolf writes a story about how you selfishly prevented your wife from going on a trip that everyone had already agreed to. Your wife calls her friends and blames you for ruining the weekend without taking responsibility for the real reason why she can’t go.

    It’s not about healthcare. It’s about stopping incompetent government from wasting my money. Thank you to those with the courage to stand up to this and hold Obama (who I regretfully voted for the first time) accountable. Shame on those who fail to take responsibility and act like this is some far right wing agenda.

  67. ReportJonathan McKenna | October 1 10:33pm | Permalink


    “could it be that stupidity you refer to is on the left as well as the right?”

    Sorry I must have misunderstood something or been misinformed. From all the news I read, I was under the impression that it was Republicans (running scared of the Tea Party) that, in MW’s words, “want to close down the government in order to prevent this already enacted reform from going into effect”

    You’re telling me/us that this is the fault of another political group? That a “left wing” faction in the House that keeps attaching a series of measures that would repeal, defund or delay the health law?

  68. ReportCM1983 | October 1 10:30pm | Permalink

    @Jonathan McKenna Climate change!? Does that mean they have gotten their heads round evolution yet?

  69. ReportMartin Wolf, FT | October 1 10:21pm | Permalink

    @ Rockyusa,

    I should add that there is already massive government spending on health insurance. Indeed the US government spends as much as most other developed countries on health. So the US already has a socialist system. The difference from everybody else’s socialist system is that the US only covers parts of the population, leaving the rest of the population to the wolves. I simply don’t see how anybody – I mean anybody – can defend such arbitrariness.

  70. Reportbubble bear | October 1 10:20pm | Permalink

    President Obama broke the law by illegally using executive power to block the employer’s mandate coming into effect this year. The President according to the Constitution has to enforce the laws as passed by Congress – in this case the Affordable Health Act. The President has also used executive power to exempting trade unions from parts of the law. So it is difficult to see the point that this article is making about the Republicans defying the law of the land. The law and the constitution have already been trampled upon by this Administration and incidentally by the Supreme Court with its nonsense ruling that Congress has the power to levy taxes on those who don’t buy health insurance.

  71. ReportMartin Wolf, FT | October 1 10:15pm | Permalink

    @ Rockyusa, If you spend twice as much as anybody else as the planet, you must get something in return, even if it is not very much.

    “The cause of this shutdown is a President who is determined to reinvent America by turning us into the equivalent of the EU that is on a moral, financial, and security death spiral.”

    What on earth are you talking about? The cause of the shutdown is a refusal by the Tea Party Republicans to allow an extremely modest reform, initially designed by the Heritage Foundation, aimed at providing universal health insurance AND coverage of prior conditions. The idea that it makes sense to close down the government in order to prevent this already enacted reform from going into effect is simply insane.

    Of course, the view of Mr Obama you express was, in earlier times, expressed of Franklin Roosevelt and Lindon Johnson – and for vastly better reasons. Unlike Mr Obama, who would have been a liberal Republican 40 years ago, these two presidents really were radical reformers. So are you suggesting that Social Security and Medicare should be abolished? Have the courage of your convictions. Answer yes.

  72. Reportsoftfinancialkitty | October 1 10:14pm | Permalink

    Rockyusa: Dude you are so out of touch with reality it breaks my heart. The truth is Americans are leaving the country for better cheaper medical care at a far faster pace than people are coming to the US. Health care costs twice as much in the states than in Canada because all the money goes to insurance middlemen, most of them worthless parasites.
    President Obama could raise the debt limit on his own by instructing the Treasury Dept to issue debt. The Congress would have to get an enforceable injunction from the Supreme Court to stop him. And Obama is commander in chief of the military so they follow his orders not the courts orders. Yes it might roil the financial markets but it would be fun to see the squabbling brats like you crushed.
    By whose standards us the EU in a state of decay? A few years ago many people thought the EU would break up and look what happened

  73. Reportnotasocialist | October 1 10:12pm | Permalink

    @jonathan mckenna

    could it be that stupidity you refer to is on the left as well as the right?

    and could it be that those on the left can never see their own faults because they KNOW they are right and their ends justify the means? and thats why they dont can anyone say obama has been a good president? in truth he is an out right failure. his achievements are as poor as Ws

    please do not try to tell me that nancy p is not consumed in loathing of everyone to the right of her in the same way the tea party hates the left

    go on get real you are really seriously saying nancy and co are sane and the tea party are not?

    i dont believe either group is very stable. the usa has a crap group of partisan politicians on both the right and the left. thats bad for us all. but the answer is not simply to move to the 3rd way left as advocated bt clinton and blair who were both more interested in personal wealth and dynasty than the electorate

  74. Reportpassionate crusader | October 1 10:12pm | Permalink

    @Greeney Davey.
    It is not just one way traffic as you so blindly presume.Many mid income US citizens now travel to Europe and Canada to get private medical treatment which costs them a third or less of what they would pay in the US

  75. ReportEaling | October 1 9:58pm | Permalink

    The key point here, should the Government go over the cliff, is “who will the electorate blame?” when the next elections come along. The answer is becoming clearer by the day. They will blame the Republicans. Not some Tea Party fundamentalist lunatics who would rather see their country default on its obligation than step back from a futile attempt to destroy a bill already approved by the democratic process, but the Republican party as a whole. With the demographics remorselessly slipping away from them, this is a last opportunity to take the rest of the country down with them so they can subsequently say “Look what happened under a Democratic Presidency”.

    This won’t wash. Polls are now showing roughly 65 to 35% blame Republicans. We are witnessing the final death throes of the GOP. And don’t doubt that this is what the tea party wants, because anyone not of the extreme right “was never a true republican anyway”. Those senior republicans wringing their hands in despair at the lunatics running the party now deserve no sympathy. The lunatics took over because you didn’t speak out loudly enough.

  76. ReportJonathan McKenna | October 1 9:56pm | Permalink

    @ notasocialist

    ISTM your invocation of partisanship demonstrates exactly the problem the US faces:
    the Tea Party are so consumed in loathing for their political opponent that they are prepared to defy the demonstrable will of the US electorate, bring the country to a halt and cause untold to damage to the rest of the world. That is appalling politics and dreadful government.

    All the commentary in the FT tonight is making that point. This is *not* a left vs. right argument. It is about the utter reckless stupidity of one political faction.

  77. ReportRockyusa | October 1 9:45pm | Permalink

    Worst healthcare system? People come here from the world over to get the most advanced, best, prompt treatments possible. Canadians cross the border in droves rather than wait months for cancer treatments, MRIs, CAT scans, and needed surgeries. Many of the best most advanced drugs aren’t legally sold in Canada and have to be obtained elsewhere.

    The cause of this shutdown is a President who is determined to reinvent America by turning us into the equivalent of the EU that is on a moral, financial, and security death spiral.

    No thanks. And more power to those who have pulled the plug on this Through the Looking Glass government. Its about time.

  78. ReportJeannick | October 1 9:42pm | Permalink

    On the bright side, it will go toward balancing the federal budget
    I suppose the capitol water and electricity have been cut, its legendary cafeteria closed down
    and its toilets uncleaned , Augia ‘s stables indeed

  79. ReportProclone | October 1 9:21pm | Permalink

    Bad behavior has been House Republicans most rewarding strategy since the 1990 GoPac memo from Frank Luntz and Newt Gingrich recommended using liar and traitor to describe House Democrats.

  80. ReportPaul Browne | October 1 9:13pm | Permalink

    I think some tea partiers have been reading the DUP guide to politics. It basically goes like this “The DUP says NO to @@@king everything!”…..

    Still, volatility is our friend, who wants 10 and 15 point fluctuations when you can have 50 and 100! 😉

  81. Reportnotasocialist | October 1 9:10pm | Permalink

    @ speaking for myself

    so its only the republicans that are bad – that is the 1st mantra of the juvenile left, describe real issues in terms of good and bad

    do you really believe that nancy and bill and hilary and barak are all just right and if the right faded away the usa would be a really wonderful place?

    go on .. really?!

    time to graduate

  82. ReportMartin Wolf, FT | October 1 9:06pm | Permalink

    @ greeneyedraven, I am old enough to remember the passage of Medicare, which, of course, the Republicans also opposed. Now it has become sacrosanct. The Affordable Care Act is certainly affordable. It is a very modest reform – too modest, alas, to fix the American healthcare mess.

  83. ReportSpeaking for myself | October 1 8:57pm | Permalink

    Agree 100% with the article.

    The way to change laws is to win elections, not by holding hostage the reputation and economy of an entire country.

    By the end of Obama’s presidency the Republicans will have been responsible for 16 years of self-harm to America; 8 years of war mongering and financial negligence by Bush administration, and 8 years of sabotaging the running of the democratically elected government.

  84. ReportJonathan McKenna | October 1 8:57pm | Permalink

    The Age of Stupid. Aren’t these the morons who also deny the scientific evidence for climate change?

  85. ReportNeo2012 | October 1 8:47pm | Permalink

    For over 200 years we lived on the princiapls of the fouding fathers which in a large part included COMPROMISE!! For the last 20 years or so we have lived with the wrst partisanship I have seen in my lifetime. Should the US indeed default, it should rest on the heads of EVERYONE in Conrgress and we should furthermore take a page out our Egytian allies and BAN both parties!!

  86. ReportOldBostonian | October 1 8:38pm | Permalink

    While Martin Wolf’s is correct overall, some of his arguments are poor. Wolf cites comparatively low life expectancy as evidence that healthcare is poor. He should know that there are many reasons for these differences, and the quality of healthcare may not be the most important one. Obesity is a very big factor.
    Then, the graph Wolf reproduces shows that PUBLIC health spending in the US (Medicare, Medicaid, VA) matches that of France. The real lesson here is that the US spends far more than other countries.

    OBAMACare addresses one problem (coverage) while leaving the other (national affordability) untouched apart from wishful thinking. While I applaud the extension in coverage (and the elimination of exclusions for pre-existing conditions), the cost of the whole system will continue to rise out of sight and towards national bankruptcy. That, I think, is an entirely legitimate gripe.

  87. ReportJonaz | October 1 8:27pm | Permalink

    France, Italy, UK, Japan and Canada have better health care on average; that is, the health care a average citizen receives in those countries is better than what an average American citizen receives.

    However, for the richest few, those who can afford literally anything, nothing beats American health care. Only the wealthiest foreigners go to the US for medical care.

  88. ReportJohn Schaffer | October 1 8:26pm | Permalink

    “Playing chicken with credibly reckless people is always scary. But the administration cannot give in.”

    So, so true that I had to repeat it again. I will continue to repeat it over and over again as we get through this idiotic behavior of both the Tea Party and the balance of Republicans who know better..

  89. Reportnotasocialist | October 1 8:19pm | Permalink

    seems that obama has not lived up to the expectations of him and there is no point in the left saying its all the rights fault

    obama was over hyped from the moment he started to run for office to the moment he was awarded the noble prize for effectively being the first black president

    he is supposed to be smart well maybe conventional harvard smart is not as smart as ronald regan smart

    he is a coulda woulda shoulda president who lacks the interpersonal skills that a president needs to build bridges

    he spends too much time playing golf and what is the betting he ends up richer than clinton and blair and soon starts to talk up one or both of his daughters as a future president?

  90. ReportDanny Barrs | October 1 7:56pm | Permalink

    Agree with Martin 100%

  91. Reportgreeneyedraven | October 1 7:50pm | Permalink

    France, Italy, UK, Japan and Canada have better health care…..hmmmm, than why do foreigners fly to the US for medical care?

  92. ReportRichard Gordon | October 1 7:45pm | Permalink

    Bravo Mr. Wolf! Well said, and well explained.

  93. Reportgreeneyedraven | October 1 7:42pm | Permalink

    The Constitution gives the House the purse strings to circumvent a corrupt Senate and/or President, as well as to defund an unpopular or unwise bill. The only people threatening a shutdown again is the President and Senator Reid. They refuse to negotiate and have stated many times on television that it if the bill isn’t their way they won’t vote on it or Obama will veto. Instead of working, the President and Senate take the weekend off and refuse to acknowledge the House bills.

    You fail to mention that the Affordable Care Act/Obamacare Universal Healthplan is not affordable and is already hurting families. This bill was unpopular in the beginning and more unpopular now because it does not lower costs, but increases the burdens on those lucky enough to still have a job or jobs.

    Full time jobs have been replaced with 29 hour jobs with no benefits – therefore, many families have to search for multiple jobs to meet their previous 55 hours a week to make ends meet.

    Instead of lowering costs or utilizing efforts to offer more low cost Urgent Care Clinics, costs have skyrocketed.

    The IRS who has the authority to repossess everything you own on a whim and is now in control of all your personal medical information.

    Economic experts claim that the fallout will include 30-40 million people losing their medical benefits are forced into paying a tax penalty due to not being able to afford insurance. So what is the whole point of the bill?

  94. Reportluctoretemergo | October 1 7:42pm | Permalink

    Mr Wolf,

    I understand the points you are making.

    That said, what we have is a stare down between a president who has a] the worst record of any modern president in terms of his relationship with Congress -bad to non existent- and b] has a verifiable track record of not being inclined to negotiate much of anything: my way or the highway, in other words.

    In this stare down, the GOP knows -as does the president and the rump of the Democrats- that there exists a broad and consistent opposition to Obamacare -around 60% of those polled- which has been there from the outset of the project and which to boot, runs from the left of the Democrats to the right of the Republicans.

    We all know how Reid and Pelosi railroaded this legislation through their respective parts of Congress -with 0% GOP support. If president Obama continues to maintain that his re-election was a reaffirmation of support for Obamacare, he’s seriously out of touch with reality for on that particular issue, the GOP is the one that’s on firm ground in terms of popular support.

    The real question is not about whether it is reasonable to shut down parts of the US government on the grounds of Obamacare, but whether it is reasonable to continue to rack up deficits and the national debt the way the Obama administration -which said in passing, has not managed to get a single budget approved since just after the very beginning- has been doing.

  95. ReportSerfdom is nice, thank you | October 1 7:16pm | Permalink

    As usual, a faulty wire will avert catastrophe.

  96. ReportWilliam Keller | October 1 7:07pm | Permalink

    This madness has at its roots southern malignancy, religious fundamentalism, duplicity and unethical richman puppet manipulation. Those who exhibit it are beyond ruth, reason and recovery. We have a Taliban of beheaders among us.

  97. Reportspook3 | October 1 7:06pm | Permalink

    What a moment to see a serious discussion begining with “is the US a functioning democracy”….. Imagine if any other developed industrial country pulled stints like these two, government shutdown, refusal to raise the debt ceiling to allow bills on already agreed programs to be paid. Now imagine the headlines. The Churchillian saying about “exhausting all other alternatives ” fits here a bit badly. this alternative did not need to happen to begin with.

  98. ReportVictor Ladslow | October 1 7:01pm | Permalink

    On the optimistic side, one could note that one the prime obstructionists, Senator Ted Cruz, has a wife who is a high Goldman Sachs official. Perhaps then the game is profit from assorted short positions and then buy really cheap.

    On the pessimistic side, the apolitical Bill Miller said on CNBC this morning that a government default will make the aftermath of the Lehman bankruptcy look like a Sunday picnic. My view is that is the US government bond market fails, so will the 17 banks which now hold 70% of US deposits, every maojr crporation that lends its cash to Repos., and, even worse, the Federal Reserve itself

  99. ReportManuel Alatorre | October 1 6:53pm | Permalink

    I believe the current shutdown is just throwing the gauntlet in preparation for the real duel that will occur when the debt ceiling vote happens, that is the fight that they hope will so heavily damage Obama’s political reputation and at the same time revive the Republican party hopes and chances.

    The Tea Party faction is now laying the strategy and tactics for the Republicans, which have entered a new and extreme version, GOP 2.0 If you will and like Mr. Wolf said they are losing the restraints that made Democratic government work.

    If the Democrats back down in face of the approaching debt ceiling talks then the Republicans can say they have effectively eliminated Obamacare by postponing it indefinitely, in any case it is, i think, a move born of a certain hopeless desperation in view of their not favorable demographic future.

  100. ReportInternational economist | October 1 6:51pm | Permalink


    While you indulge in your fantasy of rolling back the U.S. to the 18th century, what else will you get rid of: modern sewerage and sanitation, along with Medicare, Social Security, etc.?

  101. ReportWilliam Smith | October 1 6:48pm | Permalink

    Stop paying “unemployed white person welfare” – Disability

    This will all be cleaned up within minutes the second the tea party can’t sit on it’s fat ass and complain about back pains, minorities and socialism.

  102. ReportGoldsack | October 1 6:40pm | Permalink

    Probably essential to force the tea party to ultimately implode, fleeing the opprobrium of a justly outraged public. A fine article, Mr Wolf, which spells out the issues very clearly. The great Republican Party (and I use no irony here) no longer serves the interests of the American public, and it needs to split and reconvene itself as a party of low-tax, small government champions of democracy, with the civic spirit that was once its hallmark.

  103. ReportMunzoenix | October 1 6:32pm | Permalink

    If the old South doesn’t like the Federal Government, then the Federal Government should cut off all aid – like $10 billion in fiscal transfers to South Carolina, and countless billions to other Republican states that are largely poorer and have low taxes because their services are paid for by taxpayers in California or New York. Cutting them off should quickly close the deficit if we hit a debt-ceiling, and it will be on the backs who those who decry Obamacare, the Federal government and welfare the most…the very states that are most reliant on it. The latter truth is the most confusing thing about Republican policymakers. You would think they’d be for Obamacare because most of their constituents are the least insured, while it will be another way to keep milking wealthy Yankee states like New York and Massachusetts that they still hate because of a war that happened 150 years ago.

  104. ReportKel Murdock | October 1 6:25pm | Permalink

    The first coupon payment to worry about is Oct 31st assuming the 17th date remains valid. That per BofAML analysis. Do not underestimate the madness however. This is by far worse than it has ever been.

  105. ReportLittle Briton | October 1 6:07pm | Permalink

    The Tea Party will come to its senses the moment that social security and Medicare are affected.

  106. ReportB2Q2 | October 1 6:00pm | Permalink

    Not at all; this government is overblown, over reaching and beyond control. The solution is a complete shutdown and then reinstate ONLY those facilities that are absolutely necessary e.g. armed forces. Really, very little else is necessary! Bennett Quillen

  107. ReportThumbscrew | October 1 5:44pm | Permalink

    I fear you are right. Exhausting all the alternatives may take some time. A pyrrhic victory for the Tea Party.



About tatamkuluafrica

I am a man who has lived n 6 of the 7 continents. I first arrived in Africa on April 18, 1981. Africa has been a part of my life since. I spent 8 months living in a Xhosa village in the Eastern Cape Province of South Africa. I was given he nickname Tatamkulu Africa. In Xhosa it means "Grandfather Africa." In April of 1994 I was allowed to vote in the first democratic election in South Africa..I was honored to be part of such a historical moment. It was a beautiful and a magical day.

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