Deep-rooted

Deep-rooted

Almost there, end times for capitalism?

 Almost there, end times for capitalism?

  Bimbo Cabidog on Sun 7 Aug 2011 - 23:00 (Published at Free Forum: Country Road

The United States averted a catastrophic default on its huge financial obligations. But it wasn't lucky enough to avoid a credit downgrade. Following a political gridlock in Washington that pushed the world's largest economy to the brink of a debt crisis, Standard and Poor lowered its sovereign rating from AAA to AA+.

Among three major credit ratings agencies, S & P is the most prestigious. Its downgrade was a setback to the US. This posed to trigger a chain reaction of recessionary trends all over the globe.

What brought America to this point?

The capitalist superpower hit its statutory debt ceiling of $14.3 trillion on May 16. The Treasury Department has been taking extraordinary measures to prevent default. But it ran out of options starting August, and there wasn't enough money anymore to pay the nation's bills.

The Treasury faced an August 3-31 cash deficit of about $134 billion, according to the Washington DC-based Bipartisan Policy Center. Expenses for the month ran up to $306.7 billion. The government borrows roughly 40 cents for every dollar. 

The US government incurs a huge budget deficit year on year, spending more than it raises money in tax. A credit limit is set by Congress. This time the debt ceiling has to be lifted by August 2 or the American treasury would no longer have funds to meet payments like social security benefits, military pensions, contractor payments and interests.

Slashing government cashflow alone by 40 to 45 percent could already cause serious economic disruptions. With not enough funds, the country would not be able to run itself. 

The nation has had public debts since inception. This escalated in recent years to fund big expenses like wars and stimulus packages. Every president since Harry Truman has added to the total.

The debt ceiling has been raised 74 times since 1962: 18 times under Ronald Reagan, eight times under Bill Clinton, and seven times under George W. Bush. But obstinate Republican opposition made the raising of the debt ceiling under President Barrack Obama a highly contentious issue.

The GOP's right wing Tea Party threw a monkey wrench on any effort to arrive at bipartisan legislation that would manage the budget deficit and continue to pay obligations through cuts in spending over the next 10 years as well as additional taxes.

Legislation to resolve the budgetary deficit and debt issues got caught in a tug-of-war between the hard-core capitalist diehards in the GOP who resisted higher taxes on the rich, and elements softening towards the socialist tendency to propose big revenues on wealth and higher social-welfare spending

Sober and responsible heads finally prevailed. The US House of Representatives narrowly passed a deal to let the government borrow $2.2 trillion for payment of obligations. The debt bill cleared the US Senate by 74 to 26 votes.

But partisan recklessness and the dangerous stalemate of several weeks that drew unto the last minute made a downgrade of the country's prized AAA credit rating inevitable.

The bill's passage failed to bouy the financial markets. Wall Street stocks ended down by more than two percent. Japan's Nikkei index followed suit with the same degree. The fact that the US has been almost there spooked.

"Whatever the logic about the tactics, it's very dangerous environment," World Bank President Robert Zoellick said expressing dismay. He added: "To be blunt, to have a debt default in the United States would not only be a financial calamity but should be an embarassment for every American."

China, which is America's largest foreign creditor and trading partner, scored Washington for irresponsibly putting the world on the edge. China has repeatedly urged the US to protect its dollar investments. The state-run news agency said the economic stakes of the US on the world had been compromised by "dangerously irresponsible" partisan agendas.

Citigroup's chief economist Willem Buifer described a US default as "an act of collective insanity."

Buifer said that even if a default was promptly averted, "it would severely dent the credibility of the US as a global financial player and the provider of the world's leading reserve currency."

"There would be an immediate repricing of the dollar and an increase in medium and long-term nominal and real interest rates. Asset, credit and funding markets in the US and the world as whole would likely suffer and a global recession would likely result, centered in the US but not restricted to it," he further said.

Andrew Garthwaite from Credit Suisse said a default would have been disastrous, causing a five percent contraction in the US economy and 30 percdent drop on Wall Street with massive consequences for the world.

Well, America was almost there. Sailing to calmer straits by the passage of the debt bill nonetheless left quite a considerable dent. The S & P backlash is seen to lead to loss of business confidence, market panic, a potential recession in the US and probably the same effect in the world.

The loss of topnotch credit status means the government will be paying investors higher interest rate on borrowings. The US share market would be vulnerable to an exodus of nervous investors opting for safer locations to place their money. What may be brewing during the interim lull is something to watch for with great discernment.

Some words of US President Obama bear pondering. "There are a lot of crises in the world that we can't always predict or avoid - hurricanes, earthquakes, tornados, terrorist attacks. This isn't one of those crises. The power to solve this is in our hands," the world's most powerful human said of the near debt default.

Is a recession - or worse, depression, attended by a financial and industrial debacle of massive scale something that the aging capitalist superpower - the United States, has the means to deflect? Or is it the inevitable fate of the political-economic system that has ruled mankind for a very long time?

The recent crisis in the US that threatens to unleash an economic tsunami all over the globe comes only a little more than a couple of years after the subprime mortgage crunch here toppled giant financial institutions and sent market tremors cascading across Europe and Asia. 

Are the two depressing phenomena coming after a very short interval not signs presaging the end times for capitalism?

The deadlock in Capitol Hill over the debt fiasco hides the bigger picture of the deadlock in the globalized economic order. It is a picture of the grip of transnational financial oligarchies running into contradiction with the designs of the free-market economy. It is also a picture of the monopoly of wealth by a few depriving ultimate markets for industry.

Is President Obama exactly correct in saying "the power to solve is in our hands?" The new strain of the problem threatening the same scenario of global recession - the US debt crisis, comes on the heels of a preceding crisis in 2008 that posed to send the global community into the dark ages.

The solution picked at that time was the massive bailout of banks and investment houses to the tune of more than a trillion dollars. Nearly three years down the road, the cure would breed another more deadly disease: the danger of bankruptcy of the American government with no more money in the coffers to pay debts and public expenditures.

It was a $14-trillion question that saw the world's largest economy tottering on the precipice of a collapse.

Ano bang pakialam natin sa krisis sa Tate?

Tinutukoy natin dito ang palalang krisis ng pagkakautang ng America at pagbagsak ng credit rating nito kailan lang. Dalawang yugto ang isinasaad ng mga nabanggit na kaganapan.

Una'y ang utang ng Estados Unidos na ngayo'y $14.3 trilyon na. Bibigyan lang natin ng diin ang salitang trilyon, at sa laki ng pigurang ito'y baka di na kayang kwentahin ng karaniwang calculator.

Umabot sa sukdulan ang paglala ng problema ng America kung saan, dahil sa mahigit $3 trilyong alkanse sa badyet ng gobyerno at pagkasaid ng pondong pampubliko, ay naminto ang kinatatakutang di pakabayad sa bayaring utang. Isang napakalaking dagok sa pinakamayamang bansa sa mundo kung mangyayari ito.

Kaagad na epekto ang kagulohang idudulot sa sistemang pampinansya ng Amerika lakip na ang buong mundo. Tataas ang interes ng pautang, mababawasan ang kita, babagal ang ekonomya, maraming kumpanya ang magsasara, milyon-milyon ang mga mawawalan ng trabaho, sweldo at malamang pa pensyon.

Sa di pakabayad ng utang ng Estados Unidos o debt default, nagbabadya ang isang dambuhalang krisis pangekonomya na raragasa sa buong mundo. Ito na rin ang puweding pagmulan ng iba pang kagulohan, tulad ng mga riot sa lansangan, at paggiwang ng katayuan ng maraming lipunan kabilang na doon ang Amerikano.

Ang lumalabas na susi ay ang pagkakaayos ng Democratic at Republican Party sa kongresong US - mababa at mataas na kapulongan, para isabatas ang kaukulang hakbang, kagaya ng pagputol sa mga gastusin ng gobyerno, at paglikom ng dagdag na pera sa pamamagitan ng mga karagdagang buwis.

Pero ang pinakakagyat na hakbang ay ang pagpasa ng resolusyong pataasin pa ang pinapayagang antas ng pagkakautang para makapangutang muli, at matostosan ang mga kakulangan.

Dito na nagkaroon ng political gridlock o aberiya. Tutol ang mga mambabatas na Republican, at sa pang-uudyok ng dulong kanang Tea Party movement, sinagkaan ng mayoryang oposisyon sa US House of Representatives ang pag-angat ng debt ceiling, at mga pangmatagalang tugon para maisaayos ang badyet.

Nagmuntik-muntikang lumagpas ang gobyerno sa taning na Agosto 2, para maisalin ang kapalit na pera para sa mga gastosin sa kwartera. Naipasa ang panukalang pagtaas sa antas ng pangungutang sa tonong apat na trilyong dolyares, halos sa nakatakdang deadline na mismo, sa makapigil hiningang pagtatapos.

Inulan ng batikos and US, partikular ang mga politikong Amerikano sa pagiging iresponsable at rekles. Isa sa nagbitiw ng maanghang na puna ang Tsina, na pinakamalaking tagapagpautang ng America at pangunahing kasosyong pangkalakalan nito. Makapanindig balahibo ang pagbitin ng mga Amerikano sa usaping utang.

Dahil sa mga nangyari, natiyak ang pagdausdos ng sovereign rating ng bansa, bilang isa na ring pagkastigo nito. Wala pang isang linggo, ibinaba ng Standard and Poor ang credit status ng US mula sa AAA hanggang  AA+.  Ito ang pangalawang yugto.

Maaring hindi lubos na napagtanto ng mga astig na Amerikano, lalong-lalo na ng mga pulitiko ang kalubhaan ng epektong dulot ng pagkawala ng tiwala ng mga mangangalakal. Mapeligro ito sa numero unong ekonomya ng mundo. Nangibabaw ang pagmamalaki, at pagkabulag sa makasariling adyenda.

Tatlong araw lang kasunod sa pagtigpas ng tripleng A rating ng Amerika, sa dumating na Lunes, sumadsad ang pamilihang Wall Street. Ito ang pinakamababang pagdayb ng halaga ng shares mula nang pampinansyang tsunami noong 2008. Agad tumawid ang katayan sa mga mayor na pamilihan sa Europa at Asya.

Ang pagkatakot sa malapit nang di-pakabayad ng America sa mga obligasyon nito, ang pagdausdos ng tiwala ng iba't-ibang sektor sa katayuang pinansyal nito, at ang pasabog na ring kalagayan ng pagkakautang ng mga bansang Europa ay patuloy na yumayanig sa mga mauunlad na ekonomya ngayon.

Sa anomang malalim pang kadahilanan, namamayagpag ang isang malalang krisis sa Estados Unidos na kinatatampokan ng malamang na pagkalusaw pampinansya  at pagkalugmok ng ekonomya nito.

Tinatanaw ng mga nabanggit na kaganapan ang isang malawakang resisyon o paghina ng produksyon at kalakalan sa pandaigdigang larangan. Isinasaad ng kaayusang globalisasyon na walang bansang ligtas.

Sa katanungang ano ba ang pakialam natin sa mga nasasabing kaganapan? Simple lang ang sagot: hindi kailanman makaiiwas tayo sa mga unos na dulot nito. Pinaguusapan nalang ang saklaw at tindi nila.

Ang paggana ng ekonomya sa bansa, o ang batayang pagtugon sa mga pangangailangan ng bawat pamilya, ay lubhang nakasalalay pa rin sa puhunang labas na nakapailalim sa pandaigdigang sistemang pampinansya. Ang pagkawindang nito ay siyang puputol sa daloy niyaon.

Dapat lang tandaan na maging ang balangkas ng pangkalahatang badyet ng gobyerno ay nagsasaad pa rin ng depisit o kakulangan sa nariyan nang pondo. Ang pagkalugi na ito'y umaabot sa daan-dang bilyong piso. Lahat ng ito'y tinutustosan ng utang na ang pinakamalaking bahagi ay utang panlabas.

Sa kabilang dako naman, patuloy na sumasandig sa dayuhang pamumuhunan ang anomang ambisyon ng pagpapalago ng ekonomya sa bansa, sampo ng mga kaakibat na kabuhayan: mapasa industriya, sektor ng serbisyo, o malawakang ekonomyang batay sa agrikultura. Yan ngayon ang nasa panganib na mawala.

Hindi naaampat ang umiiral na krisis pangkabuhayan, simula't sapol. Isa sa kongkretong mukha nito'y ang nagpapatuloy na malawakang kawalan ng trabaho, kung kaya't napakahalagang haligi ng ekonomya ang pagluluwas ng lakas paggawa sa mga banyagang lugar gaya ng Saudi Arabia, Kuwait, Dubai at Singapore.

Lubhang apektado ang merkado ng export labor o Overseas Filipino Workers (OFW) ng pagkitid at pagsadsad ng pandaigdigang ekonomya, lalo na sa mga mauunlad na lipunan. Idinudulot nito ang pagkawala ng pamilihan ng mga produkto't serbisyo, pagsara ng negosyo, at kawalan ng mapagtratrabahoan.

Nagbabadya ng malakihang disempleyo na tatama sa mga OFWs ang pag-urong ng pinansya at mga pamilihan bilang tampok na katangian ng patinding krisis pangkabuhayan sa US at buong daigdig.

Apektado rin ng husto ang kalakalang eksport ng bansa, tulad ng pagluluwas ng mga furniture, sugpo, saging, kopra, mga prinosesong pagkain, mga produktong handicraft, at iba pa. Ito'y dahil sa pagbaba ng halaga ng dolyar na nagbubunga ng pagbawas ng kita sa bentahang panlabas.

Ang pagikli ng kita sa kalakalang eksport ay maaring tuluyang magpasara ng mga kompanyang nakabase rito dahil sa hindi na pagkabayable ng kanilang negosyo. Karugtong ng ganitong kaganapan ang paglubha pa ng kawalan ng trabaho, at lalong pagkadestabilisa ng isang kalagayang palapit sa pagsabog.

Hindi dapat maliitin o balewalain ang mga hagupit ng krisis na nagsisimula palang mag-ipon ng ibayong tindi at pinsala sa darating na mga araw.