Did you hear about what happened in Brazil today? Teacher’s protest over low pay was apparently hijacked by radical anarchist group of young men wearing masks who became violent, and many government and financial buildings were destroyed. Apparently an earlier demonstration by the teachers (and others upset with government spending on massive sports related projects instead of on basic necessities), had been suppressed pretty harshly by the Brazilian police, so the pendulum swung the opposite direction today. Don’t think it couldn’t happen in the U.S. if we continue down the road we’re headed!
Personally, I can’t believe we’re letting the fate of our nation come down to a pissing contest between President Barack Obama and the Speaker of the House John Boehner. Who will blink first? The stakes are too high, passions run deep, and the divisions are entrenched in a way that this nation has not seen since perhaps the Civil War. So my bet is neither of them will blink, and then as my beloved mother used to say (before she passed), “Pardon her French” – “We really will be up “shit-creek” without a paddle!” I know she was quite a character. Helps to explain my own nuanced way of speaking my mind. But I digress.
If this dire political prediction of mine (and a few others at this point I would imagine) becomes a reality, then the political and economic fall-out domestically and globally is likely to be like nothing we’ve seen in our own lifetimes. Hate to be an alarmist, but I am currently having a hard time wrapping my head around any “grand compromise” in the next week between the Republicans and the Democrats (unless the political pressure just gets too intense for one or both parties). Then again, if it has all truly been political theater designed to deflect, distract, and win political points from the base, but lacking in substance or devotion (i.e. someone is bluffing), then I guess a “blink” would be in order about now.
Either way, it should be clear to everyone what happens to America (in American domestic politics) in the next week or so will influence the entire world (positively or most likely, negatively). Our shut-down is already having an immediate negative influence over the global economy and the markets. It is causing the Chinese to down-grade their own projections of economic progress for the year. It is negatively influencing the predictions and projections of the economic summits that have just taken place in Indonesia and Brunei in S.E. Asia (that President Obama was unable to attend). Thus, it is reducing our ability to have a positive influence in the region politically and economically, and providing China with the strategic opportunity to come in and take a “leadership role” in both conferences.
But most importantly, if America defaults on it’s financial obligations, we will no longer be credit worthy, and we will have massive domestic debt, but be a bad credit risk for other investor countries. Thus, we won’t be able to borrow more money from other countries (a.k.a. have them purchase our debt), and Federal employees (including the military and other “essential” employees) won’t get paid unless more “money” is printed or created electronically, thus creating hyper-inflation. Hyper-inflation is pretty much what led Germany to elect Adolf Hitler, that and his promise to make them a great nation again. I guess we should get ready for that political rhetoric to once again become fashionable in these dire times. Oh, that’s right, it already has hasn’t it? So maybe instead of tuning into the political rhetoric, and trying to tune each other out, we should turn-off the radio talk show political pundits who flame the fires of division in our nation. Then, maybe we should actually get off our butts and call our political leaders and tell them not to “play chicken” with our children’s futures! The world is watching, will we bother to even take notice this time that the sky really is falling? Or, instead, will we just turn a blind-eye to it all, until we find ourselves crushed under the weight of the political and economic reality we’ve been trying to tune out?