By the time this article is in your hands, I sincerely hope the impending US crisis will be over. It will have been almost a week since the Government of the United States shut down over Republican refusal to allow the implementation of “Obamacare” or the Affordable Care Act.
While this seems ridiculous — especially to Canadians who have had subsidized healthcare for decades — it isn’t actually unusual for a US governmental shutdown to occur. The US federal government has shut down on 18 occasions since 1976; during a shutdown, essential services continue to operate until the two parties can figure out what to do next. This time, however, the shutdown hides a potentially world changing threat.
On October 17, the United States government will breach its debt ceiling. In layman’s terms, this means that the Treasury Department will no longer be able to borrow money to make up the deficit between government spending and tax revenue. This, in turn, means that the American government will no longer be able pay its bills, which is clearly not a good thing.
This is not the first time the US government’s debt ceiling has made the news. In fact, it’s only been a couple of years since the last time the United States was going to breach its debt ceiling. In that instance, last minute maneuvering by Congress led to the debt ceiling being raised, and a crisis situation was averted. What makes this instance different is that Congress is not in session because of the shutdown, and, if they don’t get back together soon, a world of financial trouble will brew over.
All of a sudden, a ridiculous political debate filled with equally insane rhetoric — US Senator Ted Cruz compared the threat of Obamacare to Nazi Germany — becomes an issue that could have global ramifications. What are these ramifications, exactly? No one can truly know.
In the history of the nation, the United States has never breached its debt ceiling. Furthermore, it’s not even an event that has been planned for — unlike a shutdown, there is no contingency plan in place.
Many economists have started to speculate what it would look like if the American government were to breach its debt ceiling. The general consensus is that if the United States is unable to pay its bills, this would provoke a global financial crisis, as it would cause the safest asset in the financial system — US treasury bonds — to default. If this happens, it could very well lead to a global economic crisis due to the number of world economies reliant on America and the power of its economy.
For the sake of the world, I am begging America to come to some sort of an agreement. Republicans, we get that you don’t like Obamacare, but it was signed into law three years ago and is merely awaiting proper implementation. You lost, so get over it. And Democrats, figure out some way to compromise with the Republicans before you drag the entire world down around you.
Do the jobs you were elected to do, and figure out how to make the government run. The clock is ticking.
