Well the crisis may be over for now! But there will be long term repercussions?
How can the rest of the world now trust the US with its reserve currency?
For the last two years or so China has been importing massive amounts of gold.
Moreover, they have completely banned the export of any of the locally produced product. It is only a question of time before the Yuan is tied to gold.
Meaning, the US will have no other choice than follow suit! And we, if we're smart!
The fact that this political blackmail crisis has simply been deferred rather than solved, is problematic for the US economy, which is now poised on the brink of a new and far deeper recession than the GFC.
And that has implications for the whole global economy.
To put it simply, they simply cannot continue spending well beyond their means, and the tea party stands firmly in the way of any genuine and pragmatic economic reform.
Reform which has to include an equalization of income tax, and an end to the farm bill, which costs the budget annual billions, and saps the US of her ability to defend herself, let alone her so called allies?
Were this crisis to happen here, we could resolve it with either a double dissolution or the sacking of the govt by the GG, using the reserve powers.
However, no such facility exists in the US.
Meaning, the extreme right wing forces of instability can keep sabotaging their own economy, or continue shooting themselves in their own economic foot.
If these mad hatter gun nuts could get their wish list, the only possible outcome would be a brand new deeper darker Great Depression!
That's just how economically illiterate the tea party are!
They almost alone, with their insane wish list, stand in the way of easing the debt contagion.
Rhrosty.

Hi Rhrosty

I agree the tea party Republicans are reactionary with no coherent or workable political platform of their own.

Obama's partial victory today is likely to be short term. Tea party disruption will continue with that faction getting stronger each month until Obama's fixed term ends in November 2016.

Cheers

Pete

America is the top dog? Are you mad? Has the propaganda finally destroyed all your brain cells, Peter.

America works on the theory that, if we keep telling the world that we are top dog, they will believe it and so will we! This is while they argue and bicker among themselves and show the world that they can't pay their bills. America is a credit-card top-dog. It is all B.S. and lies. Only fools swallow its lies.

America only has 6% of the world's population. On what basis can it claim top-dog status? Sure, it has nukes but so do lots of other countries. America couldn't even defeat Iraq!

It's time the world realized the fraud that is America, the dangerous fraud! It has its tentacles all over Australia and is manipulating us to be anti-China.

Wake up, folks. It's reality time. The U.S. is the enemy of the world!

Hi David G

Thought you would enjoy this one :)

US dominance is temporary. Stalwart capitalist countries like China who are major creditors have long memories of US financial irresponsibility.

"top dog" is of course a derogatory term - designating the US as the most politically, economically and militarily powerful country - at the moment.

Capitalism Rules! A mixed blessing?

Regards

Pete

Two of the best treasurers Australia has had were Mr Keating, with his superannuation reforms, and Mr Costello, with his major retiring of govt debt, but unfortunately they did not go far enough: even today, employer contributions are not anywhere near 15%. And with all the surpluses during the Howard years, why was public housing so shamefully neglected so that there are now 106,000+ homeless? Is that how an 'inclusive' society operates?

(But credit must also be given to Wayne Swan for his bold tripling of the tax free threshold, that was a master stroke!)

But if the U.S. or Europe do not adopt a Tobin Tax on financial transactions, what's to stop Australia from doing so? It might contribute to our own 'sovereign wealth fund'.

And get rid of negative gearing, triple or quadruple the fringe benefits tax, get rid of middle class welfare (eg, tax the family home), stop propping up Holden and Ford etc.

Pete, as I watch Australia being swallowed up by the Yankee Imperialists without a murmur of protest, I get really frustrated.

I guess we in this country have been swallowing Yank B.S. for so long via the MSM and our televisions, we can't think anymore.

We watch them droning the world, torturing and rendering, spying on everyone, bullying other nations, killing millions, applauding themselves non-stop, and we make no comment!

Even when the political temperature in Yankeeland is boiling over and they are shown to be unable to run their own country let alone the world, we still can't see its flaws, its danger.

Where are our writers, our thinkers? All we seem to have are brain-dead politicians who form into conga lines of American suckholes.

There is a fury against this global banking fraud that is building every day. People from all kinds of backgrounds, all over the world, have had enough.
The policy of the banks has been to keep interest rates as low as possible, so as to fuel financial speculation, no matter how oppressive the effect of that would be. Low interest rates wipe out savers and devastate middle-class workers. The banksters have orchestrated this wealth transference of trillions, from the poor to the very wealthy. At the expense of everybody who isn't at the top.
I am pro-capitalism and I am pro-free market. But what you have now is not capitalism. It is a state- controlled, command and control, centralised politburo. Both in Britain and the United States and it was going that way under Labour in Australia. The States is run by the Federal Reserve, an institution that answers only to itself and to a few large banks. It's modelled on the Bank of England. Benjamin Franklin said that one of the main reasons America revolted was to get away from the Bank of England, the mother of all central banks; the most pernicious and insidious of all.
Democracy is not well served by the current political configuration in America. The entire political establishment is designed around enriching a minority of people who have access to both information and capital. It might improve under Abbott, we must just hope so
The Tea Party are a small group trying to rectify this situation

Dickybird

You exhibit clashing views that are typical of the tea party movement.

Your condemnation of "banksters" (Gnomes of Zurich?) forgets that banks provide the essential credit-loans for the capitalist, free market system that you sell.

Isn't the free market all about unfettered money transfers across borders?

Are you saying capitalism doesn't concentrate money in the hands of the rich?

Do you think the US Government could function without the Federal Reserve? Or can people do without central government?

--

David G

I can see what your getting at but views often have more impact if they can recognise the complexity of countries, economic systems and people's mixed-up behaviour. China is a case in point of a prudent compromise between capitalist and command economic values.

Being explicitly leftwing all the time wouldn't gain one knowledge of usually quiet matters from Yanks. Some are/were leftwing, centrist or rightwing neo-cons. Snowden's revelations were no surprise at all.

There are various ways to skin a cat.

--

SHRODE

I think Australia has an unusually stable and lucky financial system. Stable because their is a balance between free-market financial mechanisms (that Keating was part of) and strong banking regulatory requirements.

Australia is lucky because the China market is an option we can accentuate when Wall Street, the Fed and Congress fail (which happened in 2008 and almost now).

Regards

Pete

Pete says that "...views often have more impact if they can recognise the complexity of countries, economic systems and people's mixed-up behaviour."

I take the opposite view. Simplify things right down to their basics so that the man and woman in the street can absorb and perhaps grasp is my motto!

And it's also important to include passion when presenting alternative, controversial viewpoints. Skinning the cat with vigor and enthusiasm and emotion works for me.

Cheers!

Why is such a great republic, the first nation founded as a result of the Enlightenment and advancing humanity by unimaginable leaps and bounds, such a corrupt, arrogant empire held in such widespread resentment and contempt?

It makes sense when you remember it is TWO nations, which fought in a cataclysmic civil war between a growing democracy (flawed like any other settler state) and a huge bulk of the kind of vermin who saw fit to buy human beings as slaves, the two nations roughly separated as North and South. All that was decent was concentrated in the North and all that was vile was concentrated in the South.

The South rebelled rather than lose their power as Übermenschen to enslave human beings and the North made a terrible mistake: at the cost of the death of up to 400 thousand decent Americans it went to war to keep the cancer in the body politic.

At war's end they made the second terrible mistake: after defeating the Rebels at such cost they failed to stamp out the embers.

The embers went on smouldering and have finally come close to reigniting in an open attempt to reverse the defeat of the South and of everything rotten it stands for. That’s what the Tea Party and this demonstration of power to bring the Republic down is about. The threat will escalate until either America vomits up the poison or the poison engulfs it and all its satellites including Australia.

I would heartily recommend Chuck Thompson’s brilliant book “Better Off Without ‘Em: a Northern Manifesto for Southern Secession.”[1] The cover presents it as a bit of a romp but it’s well-researched , it gives no quarter, and its logic points inexorably to a road that America will have to take to survive.

[1] http://chuckthompson.com/