Both the BBC and Channel 4 have been telling us that the Tea party elected Republican Congressmen and women are behaving unreasonably for daring to say that the Administration should reduce its spending and borrow less. The Republicans are being lined up for the blame if there is a failure to agree a new debt ceiling and budget settlement.
Apparently to much of the fashionable media in the UK normal now is printing and borrowing on huge scale so the state can spend well beyond its tax revenues. They give airtime to the notion that if the Republicans insist on the Administration spending less to live closer to its means, there will be a default on US debt and then a world financial meltdown. People in the media are lining up to take the President’s view that if this happens we should all blame the Republicans. They think the President has a duty to the USA and the world to spend more, print more and borrow more.
Does it never occur to these opinion pushers that the President has plenty of money coming in from taxes to be able to pay the interest on the debt. It would be his choice to renege on the debt if the Republicans dug in and declined to raise the borrowing ceiling. The President could postpone or cancel other types of spending where he has more discretion if he has to live with less borrowing. I doubt Mr Obama is unpleasant enough or foolish enough to renege on the debt and trigger a financial collapse. It would hurt the people he is meant to be looking after if he did.
It looks as if the President’s super spin will succeed in getting the Republicans to agree to increased borrowing. US voters blame both the Republicans and the Democrats for the impasse over their future budget, but here in the UK the media largely blame the Republicans.
One of the ironies of the situation is that the US is doing more to rein in its borrowing by spending reductions than the UK is, but much of the UK media does not read the figures and just assume Mr Obama must be spending and borrowing more than a Conservative led Coalition, relative to the size of country. The other irony is that many of these same commentators like the EU and the Euro, so they are reluctant to come out and attack the austerity policies that characterise the weaker countries of the Euro area, where spending and wage cuts have been draconian compared to anything in the USA or UK. Republican or Conservative “austerity” policies are unacceptable, but much tougher Euro austerity policies are just fine.