US: Anyone for Tea?

All countries exist in a space between a mythical past and current reality. However, few permit past myth to destroy future hope. That is what twenty to thirty conservative Tea Party Republicans in Washington are effectively trying to do. In their minds, the Tea Party faction is standing up for the little guy in the face of monstrous socialized government in the guise of Obamacare. In fact, by closing down the US government a few dangerously deluded American politicians are holding not just America to ransom, but the entire world. Rand Paul, doyen of the Tea Party and junior Senator from Kentucky, said recently, “Washington is horribly broken. We are encountering a day of reckoning and this movement, this Tea Party movement, is a message to Washington that we’re unhappy and that we want things done differently.” They may get their wish.

This is not the first time the US government has been shut down by silly American domestic politics. The last time was seventeen years ago. However, that shutdown took place against the backdrop of a booming world economy. Today, the world’s economy can best be described by the words of an old Sting song – fragile! The actions of Paul and his colleagues could well doom the world to an economic and financial crisis even worse than the 2008 banking collapse. Indeed, without a bipartisan agreement to increase America’s debt ceiling from its current $16 trillion to $17 trillion the US could technically default on its debts. Worse, the crisis would mark the end of the Bretton Woods financial system, which placed America at the centre of world financial and economic power. The end of Bretton Woods would mark the end of the American age far more perfunctorily than a sudden decline in American military power. Americans would also see US growth-killing borrowing costs soar to levels to which Europeans have become dangerously accustomed. Emerging powers, together with China and the EU, would almost certainly push for a basket of currencies to act as the future world reserve with the mighty dollar reduced to being one in a basket of reserve currencies. America would, in effect, be shooting itself in the very foot Tea Party Republicans have lodged firmly in the American mouth.

It would be an irony to say the least if a world financial edifice made in Washington is brought down by Washington. Sadly, such disgraceful Washington politicking makes it hard for those of us who believe in America to take America seriously at such time and that is profoundly dangerous.

So, Paul may see “things done differently” – disastrously so. Anyone for Tea?

Julian Lindley-French is a member of the Atlantic Council’s Strategic Advisory Group. This essay first appeared on his personal blog, Lindley-French’s Blog Blast.

Image: (Photo: Flickr/BMills/CC License)