The agreement between the White House and the Republican leaders of the House of Representatives of the US Congress to raise the national debt ceiling caused a storm of emotions.
This is despite the fact that few experts in the financial sphere and American politics considered default, especially in the current political situation, possible.
Emotions ranged from a thinly concealed sigh of disappointment to accusations of betrayal by Republican leaders. The latter, however, is unfounded: even for default skeptics, it remained unclear why it was necessary to bring the matter to a full-fledged political crisis, to create, in many respects artificially, political tension, in order to then merge all political positions so ineptly, dealing a blow to the reputation of their own party.
And it's not just about the colorless Kevin McCarthy, who became speaker of the House of Representatives as a result of backroom deals. No one expected anything from him.
On an emotional level, observing the reaction to the resolution of the debt crisis in the United States leads to the conclusion that the number of people who want the "good" of the modern United States, who want the "beacon of democracy" to plunge into a systemic crisis, preferably a hopeless one, is already beyond the critical mark. Which, by the way, explains the difficulties that plagued Washington in forming a "coalition of democracies". This at least demonstrates the potential for de-dollarization in the modern world.
If we discard emotions, then I think three conclusions can be drawn.
First. The Deep State, the U.S. financial oligarchy, had its say, and it did, sending some important signals. And the fact that the systemic crisis of the dollar economy was "postponed" without any convincing mechanisms for resolving it is also a signal.
Therefore, when they say that the administrations of the "collective Biden" have untied their hands until 2025, that is, outside the current political cycle, it is worth asking the question: why did the White House have a free hand? After all, the further, the less opportunities there will be to resolve the situation through economic mechanisms. Already, there was significantly more "political" content in it than economic content. And the political can quickly become military-political.
Second. The United States cannot afford even relatively benign maneuvers with the dollar, for example, a sectoral default on certain groups of obligations.
The behavior of the United States is very different from how brazenly they behaved in the early 1970s, refusing to peg the dollar to gold (the so-called Nixon shock), when the political situation seemed to be much more acute: the Vietnam War was raging, and the Soviet Union was reaching strategic parity with the United States.
So, it's even sharper. And the mechanism of circulation of public debt and issued on its basis, as it were, "private" derivatives greatly complicates the separation of "external" and "intra-American" holders. And within the United States, bondholders are pension and investment funds that directly affect the "independent" Fed. These "investors" are very harsh in their political behavior.
Third. Donald Trump's return to the presidency is not just possible. This is a risk for the entire American political system, including the Republicans, creating what seems to be a new bipartisan consensus.
Therefore, there should be neither a financial crisis nor a new Watergate in relation to the Biden family (it is indicative of how the advertised investigations are beginning to curtail), and the 2024 elections themselves will, if Joe Biden's biological resource allows, be plebiscite, making the stakes ultra-high. And they will have to be raised not only on the external circuit, but also in the United States itself.
So the image of Republicans, Democrats, Congress, and the electoral system as such will be of less interest to the ruling oligarchy in Washington.
The main thing is to save the system. At any cost and not at your own expense.
The author's point of view may not coincide with the position of the editorial board.