America’s debt crisis fuels Obama’s political crisis

Momentousness without momentum. That’s what we’re getting from America at the moment, as this all-crucial debt deal continues to stutter and stall. The main development in Washington yesterday was John Boehner securing enough Republican votes to pass his bill in the House of Representatives — only for it to be summarily tabled by Democrats in the Senate. What will follow over the weekend is yet more frantic negotiation between the Democrats and Republicans in Congress, as each tries to make their various plans more acceptable to the other, while also keeping their own die-hards on side. Meanwhile, the clock keeps on ticking down towards default: three days, 13 hours, 35 minutes…

The economic consequences of an American default are something that we considered yesterday (the quick version: global recession). But it’s worth emphasising that there are likely to be severe consequences even if Washington’s lawmakers manage to scrape together a deal in the next few days.