I expect the crisis in the US will be still unresolved as you read this over your breakfast. The complacency with which many people have viewed this current logjam is not surprising. Again and again the usual stand-off between the President and the Congress has resulted in short stops in the US economy. But, ‘This time is different’.
For one thing, the deadline over the Budget will run into the deadline over the debt ceiling. This is a double whammy. Second, the Republican Party is divided and there is a ‘diehard’ minority—the Tea Party ideologues— for whom there is no price large enough to pay for getting their way. Like the Old Left, they are Flat Earthers and have a lot of grassroot support. Speaker Boehner is bound by the Hastert rule which says that a Speaker cannot bring to vote any proposition to which the majority party does not agree. Thus, a coalition of the Democrats and a small number of Republicans which could pass the Budget without the de-funding clause on Obamacare cannot be put together as no vote can be called.
If the Republicans are die-hard, the President also has no cause to compromise. He does not face re-election. If he concedes now, the rest of his Term will be a disaster with continuing blackmail. His hope is to make the Republicans take the blame until they relent. This would help his Party in the 2014 elections and who knows the Democrats may capture both Houses. That is the prize he is waiting for because then his final two years can be fruitful.
The anger and the vehemence of the Tea Party people have an explanation. Average wages have risen hardly at all in the USA in the last forty years since the Oil Shock of 1973. Profits have gone up. An ordinary worker used to be able to finance a good life style for his family working alone in a manufacturing job. With manufacturing shrunk and the new jobs requiring college degrees, the semi-skilled manual worker has lost out. Now it needs two members of the family to work and borrow on top of that to sustain the American Dream.
Lot of Americans have lost out. But in terms of expectations, the White working class has lost out most and they resent it. They do not blame the Market or the Big Capitalists. Their