The United States is beginning to resemble 17th century Poland. On 2nd August, if no deal is reached, the US government will reach its debt limit. It will not be allowed to borrow from financial markets still utterly enchanted by the opportunity to toss trillions its way. Social security cheques might not get mailed, federal workers might not get paid, maturing bonds could default. It would be an own goal of disastrous proportions. Financial markets regard US debt as the safest possible, the ultimate risk-free asset, the base line upon which all other bonds are priced. If the US threatens default, the reaction will be calamitous: the world economy will be battered. It would make Lehman Brothers and Greece look like momentary blips.
And yet, even though the Democratic president has agreed to cut previously sacrosanct spending programmes, even though bipartisan senators have forged a compromise solution, even though raising the debt limit should be a mere procedural matter, on Friday Republican leadership broke off talks on the debt ceiling. Newly elected Tea Party House members—idealistic, convinced of the intrinsic perfidy of their own government, hating any tax increase—are willing to risk disaster for their country and the world economy. It is so unnecessary, so useless, so stupid.
In the 1600s, the Polish Lithuanian state was a behemoth in eastern Europe, rich and powerful, feared from Stockholm to Moscow. One hundred years later, it ceased to exist, devoured by its neighbours. Perhaps the central cause of its decline was the liberum veto. Merely by standing up in parliament and shouting “I will not allow,” a single nobleman could nullify any legislation passed by the house. In the 17th century the liberum veto was used sparingly. By the 18th century it was commonplace. With its government crippled by the requirement of unanimity, and unable to respond effectively to changing circumstances, Poland ceased to exist in 1793, its territory divided between Russia, Prussia, and the Habsburg Empire.
No, even if the unthinkable happens and the US government defaults on its debt, I doubt its land will be taken over by Canada and Mexico. But the destruction of Poland shows how traditional constitutional arrangements can cripple a country. Without a supermajority of 60 in the US Senate, the will of the majority can be totally ignored. The filibuster, like the liberum veto, used to be deployed only in exceptional circumstances. Today it is a weapon used at will. Because each state has two senators, no matter its size, representatives elected by just 10 per cent of the population can stymie reforms demanded by most.
In all likelihood, one way or the other, disaster on 2nd August will be averted. But that we are this close to calamity, for no reason, for show, is truly worrying. The United States has genuine problems: crumbling infrastructure, declining competitiveness in world markets, blisteringly high unemployment. Because of the rise of the east, it is certainly in relative decline. Its time as the world’s only superpower is drawing to a close. But America retains great advantages. The size of its market, its relative safety in an uncertain world, its ability to draw the best and brightest from all over the planet, should ensure the US will remain prosperous and powerful for years to come. But its politics have become sclerotic and destructive. Its constitutional arrangements don’t help. An irresponsible ruling class focused on personal short-term advantage, and a constitution enshrining obstruction make me fear for the future of my country.
Fearing for the future of the US
July 25, 2011
...
