Bipartisanship is rarely witnessed in domestic polity, whether be it the domestic firmament or International polity. In the United States of America, myriad legislations are stalled and marred by the rigmarole of the Domestic ferment and political vitriol. The recent debt crisis, as witnessed in the US establishment, might ideally tar the firmament and the regimental tenor of President Joe Biden and his prospects in the upcoming American polls for the hallowed pedestal of the President. But, the obverse is true as it has been keenly observed and recorded that nearly every American President in the recent past has had to negotiate with the opposition party in the US Congress in relation to the debt ceiling and the consequential theme of the US debt crisis.
Alex De Tocqueville wrote in his 19th-century treatise, “Democracy in America”, that the twin political parties in the political spectrum in the United States are akin to two rotating gongs of a mortar and pestle mixing machine used in construction. The sludge that emanates from the womb of the machine is then utilised to stick together the masonry in the building which is being constructed. Akin to the Tocquevillian analogy, the contemporary context of the US debt ceiling theme is also quite a rankling one, keeping in view the acrimony between the Republicans and the Democrats in the US Congress. It has been historically observed that both the parties confabulate and negotiate an agreed upon settlement somehow at the last moment in order to prevent an eminent Government default which might lead to a national humiliation for the homeland and the larger fortunes of Dollar as a global exchange currency. It can be surmised that the American “Print Print Policy” in relation with its economic policy in the firmament of Global trade is now being challenged by the rise of the Yuan and Euro as the other alternative currencies for Global trade.
Also, the debt crisis could have marred the prestige and now being challenged pedestal of the American Dollar, thus puncturing the American geo-economic juggernaut and leading to adversity in the larger game of the Sino-American trade stand-off with global repercussions in the stretched supply chains. Thankfully, such a quagmire was prevented by the White House’s denomination.
President Joe Biden has cheered the “from the precipice scenario which could have mutated into an economic catastrophe. Joe Biden has been quoted in international Media that, “Biden used the moment to plead with Americans to bridge their divides, saying his compromise with top Congress Republican Kevin McCarthy showed what could be done. “No matter how tough our politics gets, we need to see each other not as adversaries but as fellow Americans,” he said, asking Americans to “stop shouting, lower the temperature and work together to pursue progress.” Thus, the geo-economic hara-kiri which could have come the way of the American nation and its hoi polloi has been evaded as always akin to the manner in which former Presidents Barrack Obama and Donald Trump charted out a safe conduit in the steamy and remorseless realm of partisanship in the American legislature during their tenures.
There have been timely allusions to the era of the Great Depression in the United States of America, which had a cascading impact on the health and stolidity of the Global economy in the backgrounder years to World War II. At this juncture, one may also dwell upon the notion that all former Presidents akin to Joe Biden successfully avoided economic catastrophes during their debt crisis issues. Every Government of the day has a debt ceiling where in there is a designated limitation on to what amount and quantum which can be borrowed by the American establishment. The trail of the deliberations on the debt ceiling in the US hark back to the Second Liberty Act of 1917, which is also referred to as the statutory debt limit. It’s also a mode in America concerning the financing of the debit. Over the years, the practice of raising the Government’s debt ceiling is adhered to, keeping in view the gravity of the paucity of capital with the White House. The utmost concern is the serene avoidance of a default on the part of the White House by fixing the limits of the Government to issue capital-raising bonds. It is considered to be the onus of the Treasury Department to make all payments, including Government salaries and payments, while the limitation of the debt ceiling in breathing distance of an economic falling.
One may also hark back to the 1980’s debt crisis. Since the inception of the New Economic order, the world emerged out of the throes of the Bretton Woods institutions. Due to the exigency of the Japanese economic juggernaut pitted against the American automobile industry’s output and the Yom Kippur Oil crisis, the global economy was badly shaken. It was in 1988 that the US Treasury Secretary, Nicholas Brady, as a precursor element, initiated the “Brady Plan”, which interpolated innovations in order to help nations in the debt reductions in the larger context of Government deficit reductions. The Council for Foreign Relations based in the US establishment contends and informs us that, “Congress has authorised trillions of dollars in spending over the last decade, causing the United States’ debt to nearly triple since 2009. Over that period, the Treasury Department’s ability to borrow money to make payments on that debt has repeatedly run into a congressionally mandated limit on borrowing known as the debt ceiling.” In order to get rid of the menacing spectre of inflation and enlarged liquidity, there has been an avowed and traditional practice in the American homeland to be flexible with the bipartisanship of the US Congress legislators. The US establishment has incurred a debt of one trillion dollars since 2001 on an annual premise since then. Also, as an attendant fact, the total national debt stood at an astronomically high and discomfiting quantum of $31.4 trillion.
US President Joe Biden cheered the “Crisis Averted” state of affairs from the pedestal of the White House in an ebullient manner. We once again lurch back to the notion of bipartisanship, wherein, the American President extolled the conglomeration of national interest bypassing the intent of narrow domestic walls of partisanship as showcased by the Republicans earlier in the day. Though it cannot be ruled out that the Republican Party dragged on the quagmire and let it worsen to place pressure on the beleaguered White House in order to make the debt ceiling settlement a last-minute strive just in time to avoid metamorphosing into national villains. Everything cannot be nailed down to the “Financing the American wars” argument and rationale when one engrosses oneself in deliberations over the financial state of affairs in the United States of America.
