Political Bickering Threatens US Economy, Again

July 25, 2012

A year ago, many Americans were appalled when partisan bickering between opposition Republicans and President Barack Obama’s Democratic Party pushed the nation to the brink of default on its massive debts. The political gridlock prompted a downgrade of the U.S. credit rating.

The country now faces even greater financial problems in the midst of a hyper-partisan atmosphere as November's presidential election approaches.

During the debt ceiling debate, a popular newspaper portrayed leading politicians from the two parties as whining brats in diapers.

Washington was nearly paralyzed by bickering as it tried to make tough political and financial decisions.

The squabbling prompted Standard & Poor's to make an unprecedented cut in the U.S. credit rating.

“There had been significant deterioration recently on both the political and fiscal front -- on the fiscal front, in terms of the government indebtedness as a share of the economy, and on the political side in terms of the willingness to arrest that deterioration,” said Nikola Swann, a key S&P analyst.

Economists say the polarization inherent to this year’s election campaigns could make Washington’s dysfunctional politics even worse.

Last year’s congressional debate focused on efforts to raise the legal limit on what the U.S. government can borrow to fund its deficits and debt.