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It is not the economic woes in the U.S. that have thrown the globe into financial chaos. It is our insensate politics and our unceasing military adventurism that has swept the rug out from under the feet here, there, and everywhere.

The sliding economic picture in the U.S. is a symptom, but it is not the cause, of now global unease. As Paul Krugman notes:
“The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.”

The current political climate in the U.S. prevents it from putting its own financial house in order, and seriously undercuts its role as a stabilizing force to inspire confidence in international markets.

That the Tea Party assumed enough control to ensure a bad end to the U.S. debt ceiling debate is symptomatic of a broken political system, in which neither of the two main parties is able to set aside the battle for supremacy long enough to do real work on behalf of millions of struggling Americans. Never before have both parties dug in so deeply along political battle lines as to render any action utterly impossible. Neither have the parties ever been more willfully heedless of the wishes of their constituents.

The first recession was avoidable. Its seeds could be seen clearly taking root with the passage of the Gramm–Leach–Bliley Act in 1999, which Clinton signed into law. Bank deregulation allowed a financial Wild West shoot ‘em up mentality that Reagan would have admired. The recession of 2008, caused by the various bad actors taking advantage of deregulation during the decade after passage of GLB, only gave the global financial community confirmation that the U.S. was indeed still playing at Cowboys and Indians, and was therefore not to be trusted.

The prolonged and now deeply entrenched political battle between the major U.S. parties to wrest control of purse strings loosened by deregulation has had a catastrophic effect, and it is no small wonder that the battle has ‘gone global’.

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