Obama 'looking for good partners'
RAW VIDEO: US President Barack Obama says he's looking for good partners, when he addressed the National Governor's Association.PT0M54S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2f2hm 620 349 February 25, 2013
America has plenty of enemies but they can probably relax. Who among them could do to the US the amount of damage that it is doing to itself?
Terrorists brought down some buildings in New York and punched a hole in the Pentagon. But it was not a terrorist who brought down the US economy at a staggering cost of more than $US20 trillion ($19.4 trillion) in losses in the value of family homes, shares and retirement funds.
It was, of course, poor US policy and weak governance. In other words, it was self-inflicted, man-made and entirely avoidable. The enemies of the US can only dream of inflicting this much damage on the superpower.
Illustration: John Shakespeare
Chinese cyber assailants may have caused damage to the US economy valued in the hundreds of billions of dollars, we heard last week. This marks them as serious underachievers compared with the US's legislators, regulators and central bankers.
Yes, the terrorist attack in 2001 did kill nearly 3000 Americans. But the pointless and unjustified invasion of Iraq two years later killed almost twice as many.
Similarly, a terrorist cell or hostile power might conceivably blow up the US Congress or kill a bunch of its political leaders. But who is capable of inflicting an attack so severe that it could force political paralysis and dysfunction on the country so that it cannot make vital decisions? Not just for a day but for years?
To create this much havoc requires the special skills of the US Congress and presidency. This week, for the third time in three years, the US stands on the brink of a fiscal cliff.
If the Congress and the President can't agree on the national budget by Friday, automatic cuts to government spending of $US85 billion will kick in. This is known as ''the sequester''.
It's not a large sum in a country with a national budget of $US3.5 trillion. But consider some of the effects.
First, national economic growth will fall by about a quarter, or 0.6 per cent of gross domestic product, with the loss of 700,000 jobs, according to the well-regarded consultancy Macroeconomics Advisers.
Second, the cuts will crimp welfare payments to millions of Americans. Almost 2 million people who have been out of a job for six months or more will see a cut of 11 per cent or $33 in their weekly payments, for instance. Payments to the poor for nutrition assistance and low-income housing will be cut, too.
Third, the government will cut payments to its own workers and services, including a cut to the defence forces equal to 13 per cent of their budget over the rest of the fiscal year, to the end of September. In anticipation, the Pentagon has delayed the deployment of an aircraft carrier battle group scheduled on a routine rotational deployment to the Persian Gulf, for example. Some of the effects would not be overcome for years, according to the Defence Department.
Fourth, US credibility will suffer. The new Secretary of State and one-time presidential candidate John Kerry said last week that ''the greatest challenge to America's foreign policy today is in the hands not of diplomats but of policymakers in Congress''.
Kerry said: ''It is hard to tell the leadership of any number of countries that they must resolve their economic issues if we don't resolve our own.''
The former Australian treasurer Peter Costello said in 2009 that the US had ''lost its bragging rights''.
Bruce Reed, now the chief of staff to the US Vice-President, Joe Biden, said in a speech in Melbourne that year: ''You know you've hit bottom when Peter Costello is telling you you've lost your bragging rights.''
The sequester was never supposed to happen. It was conceived by the Obama White House to have ''a consequence that would be so unacceptable to everyone that we would be able to get action'' as Barack Obama's nominee for Treasury secretary, Jack Lew, said.
But surely, if it's so serious and so soon, there must be earnest negotiations under way in Washington to avert the crisis, at the very least? Wrong. There are not.
Obama and the Democrats have made a proposal; the Republicans have not even made a formal counter-offer.
Obama has tried to pressure the Republicans into a response: ''Are they willing to compromise to protect vital investments in education and healthcare and national security and all the jobs that depend on them, or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special interest tax loopholes that benefit only the wealthiest Americans and biggest corporations?''
The absence of a Republican response, so far at least, would seem to answer the question. Is there a great outcry from the American public? ''We're one week away from a massive cut in federal spending,'' wrote the former secretary of labour in the Clinton administration Robert Reich at the end of last week, ''yet the silence is deafening''.
Why? A prerequisite for outrage is awareness. The polling firm Pew last week reported: ''After a series of fiscal crises over the past few years, the public is not expressing a particular sense of urgency over the pending March 1 sequester deadline. With little more than a week to go, barely a quarter have heard a lot about the scheduled cuts, while about as many have heard nothing at all.''
And even if this impasse is resolved, another fiscal crisis looms in March and more will follow every few months about spending cuts, debt ceilings and tax increases.
An exasperated Reich said: ''It's no time for showdown fatigue. It's time to fight.'' Without much public awareness, there's not much public concern, and without public concern, it's hard to generate a fight.
And this may be the ultimate problem. The US system of problem-solving, otherwise known as national politics, is not working. And the country seems to be in danger of neither knowing nor caring.
Yet you can assume that just about everyone in the US will know something about the Oscars. The Roman satirist Juvenal saw the decay of the Roman Empire as a problem of the distraction of the people with ''bread and circuses''. What would he say about America today?
Peter Hartcher is the international editor.