About two weeks ago, Diane Swonk, chief economist for Mesirow Financial and an economic advisor to the Congressional Budget Office and the Federal Reserve Board, talked to MSNBC about the state of the debt-ceiling crisis. She noted, among other things, recently having returned from Europe.
“Coming back from Europe, the Europeans just can’t believe we’d be so foolish as to decidedly squander away our debt rating in such a frivolous manner,” she said. “This just doesn’t make any sense whatsoever.”
Some observers on the other side of the Atlantic are becoming increasingly blunt in their assessment.
Right-wing “nutters” in the United States Congress holding up a deal to prevent a catastrophic debt default are a greater risk to the global financial system than problems in the euro zone, a British minister said Sunday. […]
“The irony of the situation at the moment, with markets opening tomorrow morning, is that the biggest threat to the world financial system comes from a few right-wing nutters in the American congress rather than the euro zone,” he told BBC television.
This also comes the same month as a powerful editorial in The Economist, a conservative British publication, explaining that Republicans are creating a crisis, on purpose, for no reason: “It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.”
The Financial Times’ James Crabtree added this morning that Asian central bankers, watching the American fiasco, have been reduced to “resigned incredulity.”
I do wonder, from time to time, how I might explain this crisis to someone from outside the United States. Why would American officials, on purpose, choose to stop paying America’s bills? Why would these officials want to deliberately undermine the country’s credit rating? Why would elected lawmakers, who presumably like their country, risk an economic crash on purpose? Why would American voters elect such lunatics?
Alas, I’m not sure how I’d answer any of these questions from an outsider looking in. The best I can do is try to explain that there’s a deep strain of madness that’s overcome one of our major political parties, and it’s an illness that puts us all at risk.