Hussein Obama created a crisis to bully the Senate and Congress into accepting his socialist program without modification. The real threat is to US democracy.
For the last year the news media has been fed horror stories by the Obama Administration that could become self-fulfilling. Central to the stories was the concept of a Fiscal Cliff that would create total economic disaster for the US and the World unless Senate and Congress signed a blank cheque for the President to fill in the details and the amount.
The real crisis is the threat Obama has posed to the US democracy. There is always a danger in an executive presidency that a president will attempt to take over all of the powers of the elected representatives and reduce the representative chamber(s) to a rubber stamp. In Germany this is what happened when a Party with a dubious mandate succeeded in moving all real power to its leader Adolph Hitler to rely on manipulating the population through the exercise of a massive propaganda program. Obama has been attempting to take this path even though he failed to win a majority of votes at the recent Presidential elections and consequently has a questionable mandate. Rather, his electoral weakness seems to have urged him forward to neutralize those representatives who secured their own local mandates.
The Clinton Administration set the program for massive over-spending, where the US depended increasingly on running up a huge Federal Debt and State Administrations were often as profligate. In an attempt to replicate social medicine on the European model and increase the percentage of Americans who depended on the Federal Government for public service jobs and social benefits, Clinton attacked the economic model that had allowed the US to become the dominant economic and political power.
George W Bush failed to reverse the trend although it can be argued that he reduced the rate of increase in social debt. His difficulty was that he was forced into a position of waging several wars, with a consequent demand for huge budget resources. The US discovered, that with the exception of Great Britain, its friends and allies were slow to commit more than a token support in Coalition Forces to fight these wars. That placed the lion’s share of cost directly on the US at a time when a series of commercial scandals were about to set the stage for a major recession.
Critically, the US position made it difficult to get to grips with the economic pressures that were resulting from the expansion and rise of a number of new economic powers, particularly in China and India. The result was that the US became less competitive in winning export orders and more dependent on importing, particularly from China. To fund this trade deficit, the US came to depend on increasing national borrowing, rather than in regulating taxes and public spending adequately. That is of course a lifestyle choice by a nation, but eventually it has to be paid for and, the longer the deficit continues, the greater the pain, when the inevitable economic adjustments have to be made.
When Obama swept to power, he was bound to disappoint because he had been hyped, with many promises that could not be fulfilled, even in a full two-term Presidency. In the even, his first term was limited by dithering and political posturing that earned him very poor ratings. He was to win a second term largely because Republicans were seriously divided in selecting a Presidential contender and indulged in extensive negative campaigning which presented the Democrats with the ammunition to use against whoever emerged as the Republican contender. Ironically, the Republicans selected eventually the one candidate who stood a reasonable prospect of turning the economy around. Romney had demonstrated an ability to turn around failing companies and made a fortune in the process. Somehow the Democrats succeeded in turning this economic ability into a social weakness and turned the voters attentions from Obama’s many proven failures to a negative impression of the Romney successes. They also depended heavily on convincing those Americans dependent on the Federal budget that Romney would cut public sector jobs and welfare payments.
The result was that US politicians began to copy European politicians in ignoring the voters and treating them as only important in terms of relative votes. That meant that, at a time when full focus on the economic issues was critical, US politicians concentrated on their own narrow self-interest. The consequences of a looming deadline, before the automatic enactment of massive tax rises and draconian spending cuts, was largely ignored and it left US politicians desperately scrambling to fudge some sort of compromise agreement at the 11th hour and beyond.
The Obama offer was for Senate and Congress to vote in legislation that contained no detail and allowed the President to write the detail after the legislation came into force. Essentially, he has been saying that he is unprepared to trust Democrats and Republicans to debate and consider detailed legislation and wishes in effect to become a dictator who can introduce whatever legislation he thinks fit.
In the process there are many falsehoods and the crisis is not the crisis it has been portrayed as.
The one potential light is that the US is a two-Party State and there are many historic examples where Democrats and Reblicans decide in the public interest to vote with their nominal opponents. There is still a possibility that enough Republicans and Democrats will combine to counter a power-hungry and arrogant President.
The President has had the power to suspend the automatic tax rises and spending cuts for a period of at least 90 days to give Senate and Congress the time to debate detailed proposals and enact legislation that can be approved by the President. Obama has deliberately chosen to ignore that option because it does not support his real plan of stealing power from elected representatives and holding the economy to ransom.
This is a very high risk strategy, before considering the democratic implication. There is a very real prospect that the financial markets will take fright and whatever legislation may by introduced, and whenever that happens, the market reaction will become an automatic progress to full global recession, aided by the dire situation in the Euro Zone. Once that trend is established, it will become very difficult to slow and halt, never mind reverse.
The danger that then follows is that fear and anger will combine at many levels to create a very unstable global political environment where countries move towards war and civil war.
It may now be that Obama has created conditions that are beyond any direct immediate control and we may be forced to watch the train wreck happen before anyone can attempt a recovery.