POTENTIAL MELTDOWN (3)

Talks aimed at raising the U.S. Federal Government's debt ceiling have been going on for some time. The last time I wrote about this was on 23 June; but not much has happened since. The Republicans still insist that any deal to raise the ceiling should not include tax rises; the Democrats still insist that no deal can be done without them. President Obama is trying to broker a compromise, but it is tough.

One thing has happened since then, however; time has moved on. We are now much closer to the 2 August deadline set by the Treasury Secretary, following which the Government will have to stop paying somebody. Employees, military personnel, bondholders, pensioners, suppliers, nobody quite knows whom. The only certainty is that non-payment will precipitate a huge financial crisis.

It's never been more important for American politicians to show some understanding of the national (indeed, world) interest. It's never been more obvious how little they have.

Walter Blotscher