Adam Posen: America’s folly

Follies with Consequences: The US Debt Default Dance

Self-inflicted wounds get you coming and going, especially when suffered in public.  The fiscal follies last month of the US Congress over the federal government debt ceiling and budget sequester are more than simply embarrassing.  They have damaged the US economic recovery, and they have done lasting damage to US financial stability and negotiating power.  And the whole breakdown was completely avoidable in economic terms, which if anything increases the reputational damage.

There is no known other example of a solvent democracy…