The United States faces a potentially catastrophic default on 2 August, when it will no longer be able to pay its bill without a Congressional deal to raise its borrowing limit, reduce spending or raise taxes.
Ryan Bachoo, a 21-year-old Commonwealth Correspondent from Trinidad and Tobago, fears Obama is to blame for not aggressively tackling American economic problems.
For those of who you are familiar with me, you would know that I happen to be a huge Barack Obama fan.
However, I fear that the United States President may have just got one move wrong at a crucial time, with general elections in one year’s time.
In his inauguration speech of 2008 (which I can never get tired of listening), Obama acknowledged that the state of the economy demanded ‘bold and swift’ action – and he promised to act. I fear now that he may have forgotten the bold and swift part.
With the US fighting against the default date of 2 August, when it is predicted the government will run out of cash to pay its bills, possibly triggering another financial crisis and recession, Obama may be fighting a battle that could go down to the last day.
Let’s go back a few years though, because it is difficult to make sense of Obama’s first few years in office when it comes to the economy. Again, in his 2008 address, he acknowledged that Washington had for far too long been putting off ‘unpleasant decisions’. But now in his final year in office, he’s rushing to pull the economy back from the brink of destruction, much like he did in his first few months in office. Then a stimulus package was put in place, but that’s merely life-support.
There is enough evidence to start convincing the public that Obama, as much as I hate to admit it, may lack a stringent plan to get the American economy back up and running. The current major policy seeks to tax the richer heavier, but even with that plan, there are hardly enough rich people in America to single-handedly strike off a few trillion dollars of the national debt.
Obama may be missing a trick in this advanced game of monopoly (not for children under the age of 24), and that trick has to be signalling out the major role China plays in the US economy, and more-so, treasury. Three years ago, when he took office, Washington seemed to be on the verge of major changes, and finally, in a few decades, it seemed the engine of the world was ready to make big decisions. But those bold decisions were never made, except for the healthcare reform bill that passed, but that in itself will not show immediate signs of assisting the wounded US deficit.
Then, the sort of decisions that needed to be made involved stifling out China’s hold on American bonds ($907bn in 2010). These decisions can still be enacted but the results will not show in the space of time the American people would like. America needs China out of their trade-market, even more than China needs Obama out of their business of Tibet. I firmly believe China’s goods should be heavily taxed rather than the rich of the country.
The amount of Chinese goods that flow through America weekly can have a significant impact if taxed aggressively. Could China leave the States and find other markets for its goods? That’s precisely what America needs. Another key aspect is trade, as China still plays a very important part of trade in the States, Obama must make a conscious effort to ensure that America exports to China as much as it imports.
More importantly though, gone should be the days of third world labour, where clothes, accessories and electronics are made at a cheap cost in Asia and sold at a high price. Americans who can do the job, and who need the employment, should get the job, at a decent wage.
The most important aspect though, is immigration, which was one of the things Obama took care of first in office. For a powerful nation such as America, immigration must allow the free flow of visitors in and out of the country, but somehow there has been an influx of too many migrants who have been pulling down the economy rather than helping it. There must be a system that filters out the negative inflow and keeps the investors whom can bring in revenue.
A default seems hardly likely to take place, as China would definitely lose as much or even more than America, but it is still very possible. It is unconstitutional, but I won’t buy in to that talk. I do believe that America will survive the default date, but the economy will be seriously wounded thereafter, and I can’t see the nation being prosperous at the current rate.
One got the feeling that Obama was the chosen one to give Washington a kick up the rear, but even he has defaulted on some big decisions since coming into office. There is little that suggests he can wait much longer though, as the US faces either rebuilding its empire or the White House being papered over by the Chinese flag.
Somehow though, like a superhero, politicians tend to make last minute “life-saving” decisions, and I hope this is just one of Obama’s public relations gigs, because if not, the joke will be on him.
Opinions expressed in this article are those of the author and do not necessarily represent the views of the Commonwealth Youth Programme. Articles are published in a spirit of dialogue, respect and understanding. If you disagree, why not submit a response?
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