JOHANNESBURG, SOUTH AFRICA
THIS WEEK THE US SENATE FINALLY came up with the bill that ends the government shutdown that lasted for weeks. It’s hard to understand why the US puts itself through all of this. Why exactly? Well, it all seems politics. And it’s sad because such actions drag their economy. I wonder whether they ever think about the consequences before playing politics.
According to S&P, the cost of the government shutdown to America’s economy was $24 billion, just above $1 billion a day. That’s a lot of money to be wiped out of the economy for no reason. It all happens in an economy that’s still recovering from the 2008 financial crises.
At the IMF and World Bank annual meetings last week, finance leaders from around the world urged the US to get its budget and debt ceiling sorted. Any global economic recession would have a huge negative impact around the world, especially the emerging economies. India’s economy seems stuttering and they’ve been paying a price on America’s Federal Reserve post-2008 financial crises monetary policy.
Americans are shooting themselves on the foot by all these incessant political gridlocks in Washington. Experts have pointed out that China will be the world’s biggest economy in the next 10 years (if I’m not mistaken). Well, it might be way before that. Maybe 5 years from now we’ll be living in a world whose super-power is China. I don’t know about you my friend, but I Phumlani UMajozi, am not ready for such a world. This week, they (the Chinese) called for the “de-Americanized world”, that it’s time for a replacement of the US dollar as the international reserve currency. China is the world’s second economy now, so such statements from this Asian giant gain traction.
The bottom line is that Americans will pay a price for this absurd political gridlock we see in Washington. It’s interesting because in all these issues, President Obama emerges a winner. If Americans still want to maintain their super-power status, at least for some time (I wouldn’t know how long), they need to stop to continuously put their economy at risk. PM
© PHUMLANI M. MAJOZI