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By Martin Khor (China Daily) Updated: 2013-10-30 06:58It happened again on Oct 17, at the last minute the United States avoided debt default. But the world is losing patience with the country's dysfunctional leadership.
The world waited with bated breath as the deadline neared. And breathed a sigh of relief when at the last minute the US avoided crossing its "debt ceiling" and a default on its debts. The debt ceiling was raised, and the part government shutdown ended on Oct 17 after weeks of a high-profile standoff between US President Barrack Obama and the Republicans in Congress.
US President Barack Obama delivers a speech in the State Dining Room of the White House in Washington DC, the United States, Oct 17, 2013. [Photo / Xinhua]
But this relief was mixed with incredulity and frustration.
First, the respite is only temporary; the can has just been kicked down the road. The deadlines for government shutdown and debt ceiling are shifted some weeks away to January and February next year.
Second, this fiasco has happened several times. Each time Congress has given the US president a reprieve of just a few more months, and a new deadline looms again.
The Republicans are adamant, they want to cut the government's spending and its budget deficit, and won't allow it to function unless they get what they want. Previously, Obama compromised and gave in significantly. This time he stood firm and refused to negotiate. The Republicans went too far, choosing to de-fund and damage his landmark medical insurance reform as a condition for lifting the debt ceiling.
Obama decided "enough is enough" and relied on public opinion to win his gamble. The Republicans blinked, as the public heaped the blame on them. Republican leaders in Congress had to eat humble pie and agree to end the shutdown and lift the debt ceiling without de-funding or changing the "Obamacare" healthcare reform.
But third, while the US president finally showed the Republicans who the boss was, the damage had already been done to the US' image as a superpower and the champion of American style democracy. The US governance system has become dysfunctional, with one side of the political divide willing and able to paralyze the government functions led by the other side, using the weapon of withholding approval for the government's budget and capacity to borrow.
Just days before the deadline, the world's finance ministers meeting at the annual IMF-World Bank meeting in Washington highlighted the extreme dangers of a US debt default. Around the world, leaders and analysts mourned the end of the past certainties surrounding the US and its dollar as the world's financial leader.
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