US debt deal merely delays pain for all
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Global Times, August 2, 2011
The Republicans and Democrats finally reached a deal on Monday to raise the US debt ceiling.
The whole negotiation process suggested a latest Hollywood blockbuster, entitled "Last-Minute Deal," and filmed with special "democratic" effects made in the US.
Audiences around the world, countries who were glued to the screen due to their involvement in the debt crisis, can now relax since the scary movie has ended. The US, according to President Barack Obama's speech, is now waiting for applause, rather than complaints, for the compromise.
But it is too early to cheer for this deal, since raising the debt ceiling simply means the US can now borrow itself into further debt. The country is now reportedly able to borrow $2.4 trillion, up from the current $1.5 trillion upper limit.
This does not seem a smart move. By using new debt to pay back the old, the US is sinking further into quicksand. This is not a selfless sacrifice made to save the world, as debt-holding countries are all chained to the US. They would have to keep the US afloat, or everybody would suffer.
The US rules the world in terms of democracy, legal systems and financial institutions. However, something went wrong when these advances became intertwined, locking debtors in a maze that has no exit. The US is well-known for promoting rules and regulations to other countries, but now countries are increasingly realizing Washington can stamp all over its own rules and regulations.
It is difficult to talk sense into the US. The country is too powerful and has already set its own rules on the global political, financial and media agendas. No country is able to challenge this order, as past experiences have proven that the US eliminates anything that threatens its dominating role. Thus, countries better protect themselves, and try not to cause trouble for the US.
But China can hardly take this path. Its enormous but depreciating foreign reserves are a pain for the Chinese people, yet there are few options to do away with them. This perhaps is the lesson China has to learn from its development.
Washington will use any means to protect itself. When the country prospers, it will use more civilized methods to secure its national priorities, but when it faces a crisis, it will use all methods to defend itself.
The US debt China holds is too small to have any major leverage. It needs more patience and wisdom to acquire the capability to deal with the US.
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