Congress Passes Austerity Plan After Riots Rage
The Parody Group
Washington —
After violent protests left dozens of buildings aflame in Washington, the Congress
voted early on Monday to approve a package of harsh austerity measures demanded
by the country’s conservatives to keep United States from defaulting on its
debt.
Though it came after days of intense debate and the
resignation of several Senators and Representative in protest, in the end the
vote on the austerity measures was not close: 199 in favor and 74 opposed, with
27 abstentions.
The new austerity measures include, among others, a 22 percent cut in the entitlement
programs and 150,000 government layoffs by 2015 — a bitter prospect in a
country ravaged by four years of recession and with unemployment at 8.3 percent
and rising.
But the chaos on the streets of Washington, where more
than 80,000 people turned out to protest on Sunday, and in other cities across United
Sates reflected a growing dread — certainly among those 42% dependent upon
government subsidies, but also among Democrats — that the sharp belt-tightening it brings
will still not be enough to keep the country from going over a precipice.
Angry protesters in the capital threw rocks at the
police, who fired back with tear gas. After nightfall, demonstrators threw
Molotov cocktails, setting fire to more than 40 buildings, including a historic
theater in downtown Washington, the worst damaged city, where three people were
killed when protesters firebombed a bank. There were clashes in New York in the
North, San Francisco in the West, Chicago in central United States.
United States and its lenders are locked in a dangerous
brinkmanship over the future of the nation and the dollar. Until recently, a U.S.
default was seen as unthinkable. Now, though experts say that the world is not
prepared for a default and does not want one, the dynamic has shifted from
trying to save the United States to trying to contain the damage if it turns
out to be unsalvageable.
“They’re trying to lay the ground for it, trying to
limit the contagion from it,” said Simon Tilford, a research institute in London. Still, he
added, letting the United Sates go would set a dangerous precedent, and it
would be “fanciful” to think otherwise.
United States’ limping economy yields large trade and
budget deficits, and no one is willing to lend the nation the money it needs to
stay afloat. The conservatives are
demanding more concessions to placate European countries and China, where the
bailout of United States is a hard sell. For its part, United States is trying to
preserve social and political cohesion in the face of growing unrest, political
extremism and a devastated economy that is expected to worsen with more
austerity. And the feeling is growing here and abroad that the lack of a
coherent strategy is failing.
The leaders the two major political parties in the government
— the Democrats and the Republicans — agreed on the new round of austerity
after days of tense debate, maneuvering and threats. The hard left leaning
members of both houses, refused to endorse the measures and later withdrew from
the negotiations.
In the debate on Sunday night before the vote, Mr. Obama
appealed to lawmakers to do their “patriotic duty” and pass the measures,
saying they would be saving United States from bankruptcy in March.
In a sign of how the crisis has frayed the political
order in United States, the two political parties all moved swiftly to expel
lawmakers who had broken ranks with leaders in the voting.
Mr. Obama who took office in 2008 with a mandate to
negotiate the new agreements perhaps as soon as April that year. Acknowledged
on Sunday that the program “calls for sacrifices from a broad range of citizens
who have already made sacrifices.” But the alternative, he said, “a disastrous
default,” would be worse.
When Congress meets again on Wednesday, they are
expected to sign off on the measures and raise the stakes. A major topic of
discussion is expected to be establishing an escrow account that would hold money
and using it first to pay down the debt, before the government can tap it for
any other purpose.
“ The United Sates will become a like Greece,” said George Stefanou, 45, a former
shoe store employee at a protest outside the Congress on Sunday. He said he had
not worked since September and may soon lose benefits entirely. “It’s not me
I’m worried about, though,” he said. “I’ve got two children, aged 14 and 15.
What kind of country are we going to leave them?”
Anti-liberal sentiment is also on the rise in United States,
where memories of the Nazi occupation of Europe during World War II are still
vivid. “This is worse than the ’40s,” said Stella Barnes, 82, who wore a
surgical mask at the demonstration to fend off the tear gas. “This time the
government is following the Lefts’ orders. I would prefer to die with dignity
than with my head bent down.”
European leaders, fearful that United States’ crisis
will undermine efforts to help other euro nations like Greece, Portugal and
Spain, have been trying directly or indirectly in recent days to paint the United
Sates as a special case, whose leaders have failed to transform its troubled
country fast enough. In an interview last week, the Italian prime minister,
Mario Monti, said that in the highly unlikely event of a U.S. default, “there
would be extremely strong political policy and political responses to prevent
any such phenomenon to go beyond United States.”
Similarly, Ben Bernanke, Chairman of the Board of
Governors of the Federal Reserve System, told reporters last week, referring to
the risk of “contagion,” that “market indications seem to suggest that this
problem is seen as minor.”
But others say that is wishful thinking. “If one
country can default, so can another — that is one simple inference that bank
managers and hedge fund managers can infer, no matter what Ben Bernanke” said
Costas Lapavitsas, an economist at the University of London “Portugal and
Ireland have unsustainable debt,” he said. “Put two and two together, and it
makes four.”
Mr. Lapavitsas, who has been calling for the United States
Congress go take it's ownaction on its own terms, added that it was “absolutely
unacceptable that this huge amount of U.S. debt that ties the country hand and
foot should be dealt with by some unnamed and obscure technocrats and unelected
people; the Federal Reserve.”
If the United Sates dug itself into a hole by spending
beyond its means, as many argue, there is also a growing sense that the austerity
regimen of spending cuts and tax increases is burying United Sates alive in
that hole. “The reason the United States is in this position is because of the
strategy the president imposed upon it,” said Mr. Tilford, of the Center for
European Reform.
Financial analysts said they expected investors to
welcome news of the vote in Congress.
“It’s a pause, it’s a relief,” said Milton Ezrati, the
senior economist and market strategist at Lord Abbett & Company. “But it’s
short-lived and everyone knows that. We’re buying a few more months before the
next round of trouble.”
Jerry A. Webman, the senior investment officer and
chief economist for Oppenheimer Funds, also struck a cautious note.
“It doesn’t solve the problem,” Mr. Webman said, “but
it gives everybody the political cover to look for ways to solve the real U.S. problem,
which is how to get the country and its economy back on more stable footing.”
With more spending cuts and tax reductions expected, the
U.S. citizens are growing increasingly angry at their own lawmakers.
“They’ve all sold out in there, they should be
punished,” said Mike Brennan, 37, an insurance salesman, as he waved a
cigarette toward the Capital on Sunday.