Does the acrimonious process of raising the U.S. debt ceiling demonstrate the genius of the American system in action? According to this editorial from Brazil’s O Globo, the deal arrived at by feuding Republicans and Democrats was a lesson for other nations – particularly Brazil – about getting ahead of debt and tax-related issues.
The O Globo editorial says in part:
There will always be contradictory views on tradeoffs adopted in situations like this. You win some and lose some with these types of agreements. That is the game.
Once again, the American institutional system has demonstrated its strength. The United States is setting a most visible example, even by demonstrating the influence of the conservative and radical Tea Party movement, a kind of Republican sub-legend. This is also an important lesson on the tax issue for Brazil. It is critical that our country mobilize. This is not something that can be dealt with behind closed doors by alleged luminaries.
The United States, due to measures taken to prevent a banking meltdown and to revive the economy – which have yet to have a major effect – raised the size of its debt to GDP and began accumulating an annual deficit of 11 percent of GDP – an unsustainable situation. There was no way to escape this adjustment, even if the country issues the globe’s reserve currency – a condition that will long continue despite the crisis.
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