The United States steps into the new fiscal year without a budget approved by Congress. According to Government Accountability Office, the national debt has grown to record high $16, 7 trillion or 73% of GDP (it exceeded this level only in the days of WWII). The figure is much higher according to informal sources (independent researchers like, for instance, James Douglas «Jim» Hamilton, an American econometrician currently teaching at University of California, San Diego).
If the debt ceiling is not raised urgently, then the US may step into a new financial crisis, as President Obama warned. US Treasury Secretary Jacob Lew told the congressmen in a letter the country may go bankrupt on October 17, the default may take place by the end of October – the middle of November when the money flows get exhausted as Douglas W. Elmendorf, the Director of the Congressional Budget Office, points out.
The health care reform pours fuel into the fire, Obama goes to any length to fund it, he won the second term election thanks to giving a promise to make medical service more affordable for common people, but many disapprove the way it is implemented. According to World Bank expert Eric Schwaitzern, a wave of city bankruptcies is expected to hit the United States in the next three years possibly triggering sovereign default. Today over 450 US cities are on the verge of going broke, including Los Angeles, San Diego and others. The «ghost city» Detroit started «the parade of defaults» that may be expedited in October to last all year long.
On October 4 Christine Lagarde, Managing Director of the International Monetary Fund (IMF), urged America's politicians to settle their differences before the dispute harmed the entire global economy. Speaking ahead of the fund's annual meeting in Washington, Lagarde said it was «mission critical» that Democrats and Republicans raise the US debt ceiling before the 17 October deadline. Lagarde said the dispute was a fresh setback for a global economy that would take at least a decade to recover from the slump of 2008-09. «I have said many times before that the US needs to «slow down and hurry up» – by that I mean less fiscal adjustment today and more tomorrow», Lagarde said. «In the midst of this fiscal challenge, the ongoing political uncertainty over the budget and the debt ceiling does not help. The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy». Willem-Alexander, the new king of the Netherlands, delivered a message to the Dutch people from the government in a nationally televised address: the welfare state of the 20th century is gone. In its place a «participation society» is emerging, in which people must take responsibility for their own future and create their own social and financial safety nets, with less help from the national government. «The shift to a 'participation society' is especially visible in social security and long-term care», the king said, reading out to lawmakers a speech written for him by Prime Minister Mark Rutte's government. «The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form».
Austerity gives rise to public discontent in the Unites States; the population is accustomed to high living standards. Meanwhile, a lot of war veterans are jobless and have no homes (80 -150 thousand according to different estimates). Chuck Hagel, Secretary of Defense, said in early October that the protest sentiments against the government and the whole order of things were strong in the country. He told journalists that the US government loses credibility among people because of the longest war in the US history (the war in Afghanistan goes through the 12th year) and the most acute financial crisis since the Great Depression. His words are corroborated by Real Clear Politics Polls Averages which show that the President’s rating is going down 6, 2 % (50, 6% – negative responses against 44, 4% who speak positively about him). The rating of Congress is down 61, 8% (77% of responses were negative compared to only 15, 2% assessing positively the congressional activities).
Washington appears to get ready for emergency. Richard Preston, leader of the Confederate White Knights of KKK, called on Americans to get together in a civil war against Barack Obama and his supporters and do it in October, when the country marks the 150th anniversary of Gettysburg…
Here are the signs the tensions are running high in the US.
The Marines are urgently brought home from Afghanistan to go through the urban warfare course. After September 10 the military rescheduled the dates of planned exercises to hold them at the end of September – the beginning of October. The furloughed army servicemen are forbidden to leave the country in the period since September 28 to November 5.
By September 28 many thousands of the Department of Homeland Security (DHS) employees have gone through the sharp shooting training course (shotguns, AP-15 rifles) and cold arms. The Department of Homeland Security acquires MRAPs (MRAP – Mine Resistant Armor Protected Vehicle), the military-style, mine-resistant ambush protected vehicles for use during «high-risk warrants». There have been reports saying it had plans to acquire 2717 Navistar Defense produced vehicles by October this year.
The National Guard servicemen had received special training to quell public street protests by September 30. Some units have exercises prolonged to last through the first decade of October in the third corps area (Washington, Maryland, Pennsylvania, Delaware, Virginia, and West Virginia). The 911 rescue team exercises are also rescheduled from September 27 to take place in the northern part of the same area too.
Starting from September 25 the US started to test daily the emergence warning system. Since 29 it started testing satellite communications and GPS receivers (these events have never coincided in time before). By the end of September over 300 schools of the corps area had to provide every school-goer with a rescue kit to make him (her) last for three days in emergency. The Federal Emergency Management Agency, FEMA ordered 22 million water packs, dry rations and hot-water bottles for the sum of $14, 2 million. It had ordered medical supplies (predominantly antibiotics) at the cost of over $11 million to be delivered by the same date. According to the World Health Organization, a vaccine against coronavirus had been prepared by the same period of time. The United Nations peacekeeping units have held urban warfare exercises (started in June) and have gone through special training courses on American English and introduction to US weapons systems.
All these preparations show the US is facing very serious internal problems. This is a situation when the temptation is great to switch the public attention over from internal US problems to the «outside» issues. Perhaps, the possible scenario may envision the Syria’s conflict spill over to encompass Iran, entailing a strike against Israel, and then the war started will change the financial realities the US faces today. Any pretext will do to justify an action against Syria. What will serve the purpose? Perhaps a falsification of chemical attack or a provocation staged in the third corps area comparable with the 9/11 tragedy to affirm the perpetrators were «Syrian guerillas» or someone who comes from Chechnya, like it was in Boston. Under the circumstances anyone could be made a fall guy.