On the Possibility of a US Default

After having seen the possibility of a Greek default deferred for a few months, we are now confronted by the more interesting, and altogether more unexpected, possibility of a US default.  Not, as in the Greek case, because they do not have an ability to pay without outside assistance, but rather because of petty squabbling among politicians who either cannot see the damage a US default would do, or are simply engaging in brinkmanship.

What is certain is the the US must do something about it's budget deficit.  It is not sustainable in the long term, and despite the fact their economy is not growing strongly, and their property market is now in decline, they must cut government expenditure.  If they do, and manage to avoid default, they still face a downgrade by S&P, which will have consequences for investors and the economy.


The biggest message from the US debt crisis we have been witnessing this week, is the narcissism of elected politicians.  When confronted by an crucial issue for the country, the US politicians have managed to think of their own political careers first, and the good of the nation second.  It is inconceivable that the US should default on their debt; the consequences of this for the world economy are unthinkable, but the politicians are able to overlook this to get in some political point scoring.

Back in the UK our politicians have less substantial matters to deal with, but we should always be aware, I think, that, like their US counterparts, most British politicians today are political careerists who will put their own career first, over and above the national interest.  There are exceptions, but generally speaking the quality of the people we elect to represent us seems to be increasingly mediocre; as evidenced by the expenses scandal, which showed us the real character of many of our MPs. 

We should remember that politicians are our representatives, and we entrust them to run the country for the benefit of the populace as a whole, and not for the benefit of themselves.  Their own personal interests must always come in second place, behind the national interest.  We should not tolerate politicians who think otherwise, in case we find ourselves in the same position as the US electorate does today.