'Fiscal Cliff'
Chicken Game Exposes Failings of U.S. Political System (Xinhua, People's
Republic of China)
Is American
democracy inherently flawed? For China's state-run Xinhua, columnist Ming Jinwei warns that
without the capacity to address fiscal issues that threaten not only the United
States but people around the world, Washington's bitter partisan politics may pull
the country into an 'abyss' it can never emerge from.
BEIJING: After coming dangerously close to falling off the
"fiscal cliff," U.S. politicians have finally come together on a deal
to avoid sharp tax increases and deep spending cuts that would affect millions
of Americans and send the world's largest economy back into recession.
Late Tuesday night in Washington, U.S. President Barack
Obama signed into law a bill passed by the Senate and House of Representatives
to end a months-long drama that has exposed the ugliest side of American partisan
politics.
Many have long warned of the potential danger of the United
States falling off the "fiscal cliff." But according keener observers,
the United States, with a total public debt of nearly $16.4 trillion, has
bigger fiscal challenges ahead.
U.S. public debt, which stands at more than 100 percent of
its Gross Domestic Product (GDP), makes the sovereign debt crisis which has
toppled so many European governments and has led to ugly street demonstrations
in Greece look like a mere hiccup.
As the world's sole superpower, the United States is clearly
not Greece. The greenback is still the dominant currency in the global monetary
system. Even when smaller European economies are completely shut out of the
global bond market, Washington can still borrow at low cost.
But economics and common sense don't lie. People, or
governments, can overspend for some time, but they cannot live on borrowed
prosperity forever.
For the Americans, their government has been in the red too
long. After borrowing heavily to support costly wars in the Middle East and stimulating
the economy out of recession in the wake of the global financial crisis, Uncle
Sam hasn't tasted a government surplus in over a decade.
And the U.S. government has issued hundreds of billions of
IOUs to cover the ever-expanding costs of its bloated entitlement programs.
With the "fiscal cliff" drama finally behind us,
both the United States and the world are now presented with a unique
opportunity to debate the much-delayed issue of long-term U.S. fiscal
sustainability.
When U.S. Federal Reserve Chairman Ben Bernanke coined the
term "fiscal cliff," he should also have been aware of the $16.4-trillion
hole in U.S. public finances.
Posted by Worldmeets.US
If you call $600 billion dollars in tax increases and
spending cuts a "fiscal cliff," total U.S. government debt must be
considered nothing less than a "fiscal abyss."
The most worrying thing about U.S. politicians is that given
how close they came to falling off a "cliff," they appear far
less likely to be able to reach a deal to climb out of an abyss.
In a democracy like the United States, tax increases and
spending cuts, the very medicine needed to cure its chronic debt disease, have
long proved hugely unpopular among voters. So politicians have chosen to kick
the can down the road again and again.
But as we all know, the can will never disappear. Sometime
and somewhere, you might trip over it and fall flat on the ground - or in the
U.S. case, into an abyss you can never emerge from.
