Question:
A heated struggle is currently taking place in the United States between the Obama administration and the Democratic Party on one side, and the rival Republican Party on the other. This conflict revolves around the budget and the raising of the debt ceiling, which the Obama government is insisting upon. The crisis reached its peak with the failure to pass the budget, resulting in the suspension of work for hundreds of thousands of federal government employees in what has been termed a "forced leave" without pay...
The question is: How can this happen in America, the leader of the democratic capitalist nations? What is this democracy that they claim treats the people fairly, yet halts their salaries through no fault of their own or any negligence in their work? Furthermore, how can the government insist on raising the debt ceiling instead of insisting on reducing debts rather than increasing them?
Please clarify this in a way that is easy to understand, and may Allah reward you with goodness.
Answer:
The answers to your questions become clear and easy to understand by considering the following points:
First: The US Budget:
Passing the US budget requires the approval of both houses of Congress: the Senate, where the Democrats hold the majority, and the House of Representatives, where the majority is held by the Republicans. Intense rounds of negotiations and the exchange of texts and proposals between the House and the Senate continued until the evening of Monday, September 30, 2013. Nevertheless, the US Congress failed to pass the temporary budget before the early hours of October 1, 2013, which marks the beginning of the new fiscal year.
Second: The Issue of the Debt Ceiling:
The US public debt is the total public debt owed by the federal government; it consists of the total security bonds owned by parties outside the United States, along with security bonds issued by the US Treasury Department and owned by parties within the United States. The US Congress sets a debt ceiling that the federal government is not permitted to exceed. It is currently $16.7 trillion, and it is expected that the government will exceed it or come close to doing so on October 17, 2013. Therefore, the federal government is holding its breath awaiting the Congress decision on that date.
Third: The Crisis that Occurred and its Causes:
- Obama presented a healthcare project named after him, "Obamacare," which means providing social and health insurance for 46 million low-income Americans. Those who do not enjoy insurance services would be able to obtain health insurance. For the project to be implemented, the necessary allocations must be approved in the 2013-2014 budget, which begins on October 1, 2013. However, the Republicans realized that the project was intended for "electoral popularity" and to gain public opinion for the Democratic Party, especially since the mid-term Congress elections are in November 2014. It is expected that Obama's healthcare plan will be a subject of discussion during those elections. Therefore, the Republicans refused to allocate a budget for Obama's project and demanded its postponement unless the law was subject to negotiation and amendment, so that it could be issued in the name of both parties—that is, after incorporating the Republican Party's vision into the project, rather than it being Obama's vision alone. This was to ensure that Obama would not gain any future electoral credit for the Democratic Party. Since the Republicans have the majority in the House of Representatives, they can block the passage of the law.
Because the issue for both parties is not about serving the people but rather political maneuvering for a future electoral harvest, both parties insisted on their positions, even if it caused harm to the people, as appeared later. Obama wants it passed, and the Republicans want it postponed for negotiation and to give it a "color" other than its current one, which bears Obama's stamp; they want a version that carries the Republican stamp... Thus, the crisis escalated with the failure of Congress to approve the temporary budget before the early hours of October, the deadline for its approval. The back-and-forth between the two parties continues to this day.
This resulted in the activation of the "federal government shutdown mechanism" due to the Republican Party's refusal to vote on the 2014 budget law on September 30, 2013. Consequently, more than 800,000 government employees went on mandatory unpaid leave, with expectations that all US institutions would reduce their staff and lay off a large number of them... This is similar to what happened previously when government activities were suspended for 21 days from December 1996 to January 1997 during the era of President Bill Clinton, where the state incurred losses of about two billion dollars at that time.
This is part of the crisis, or rather an entry point to the upcoming crisis: the government's demand to raise the debt ceiling at the scheduled time for discussion in Congress, which is about a week away on October 17, 2013. This is because the government, in its borrowing, has exceeded the permitted debt ceiling of $16.7 trillion. This is the ceiling set by Congress, which mandated that the government should not borrow more than that amount. However, the government's finances will be on the verge of bankruptcy on October 17, 2013, as its treasury is expected to have only 30 billion dollars left, rendering the state unable to meet its financial obligations.
The two parties have begun hurling accusations at each other, especially as the people's distress over the two parties' problems became apparent. Each party is trying to blame the other. Obama considers the Republican Party to be the cause and describes it as taking the country hostage to achieve its partisan interests. He stated in a press conference at the White House on Tuesday, October 8, 2013: "Members of Congress, and Republicans in the House of Representatives in particular, cannot demand a ransom in exchange for doing their jobs. Two of their duties are approving the budget and ensuring that the United States pays its bills."
The Republican Speaker of the House says that he "will not allow Congress to raise the debt ceiling unless Obama makes concessions regarding the healthcare program known as Obamacare and agrees to conduct negotiations; we cannot raise the debt ceiling without dealing with what drives us to borrow more money."
- It is clear from the tug-of-war between the two parties that both want to raise the debt ceiling, but the Republican Party links its approval to amending the healthcare law so that the Republican Party has its stamp on it... However, what deserves attention is that under normal circumstances, states manage their economic and financial affairs to reduce their debts, not increase them. But America is the only country that does not care about being submerged up to its head in debt. It issues bonds as it pleases and guarantees their payment under suitable circumstances. Even if it cannot due to its financial situation, it can—if it sees a significant interest—print more dollars without the restrictions of hard currency reserves in its vaults like other countries. This is especially true since its currency controls a large percentage of other countries' reserves. It can print more with the secret or even "public" approval of the International Monetary Fund (IMF), or without its approval, as it holds actual influence in the Fund. It can present false reasons and hide the truth, and the Fund will support it in that! Even if printing these papers leads to a decrease in the value of the dollar or inflation in prices, as long as it sees an interest in this matter. For example, news reports circulated that America printed between "2 trillion - 4 trillion" during the oil speculations that caused prices to increase to nearly 150 dollars per barrel in 2008. America was not far from that speculation; it printed those papers to be able to buy the largest quantity of oil directly or indirectly to add to its reserves. It saw an interest in that which outweighed the rising prices and the falling dollar...
Therefore, the debt ceiling in the US federal government is steadily rising. For example, government debt (central and local administrations) rose from $4.3 trillion in 1990 to $8.4 trillion in 2003 and to $8.9 trillion in 2007. At the beginning of Obama's rule in 2009, the debt was $10.3 trillion, and in 2011 it exceeded the $14 trillion mark. Now it exceeds $16.7 trillion. If another country were submerged in much less debt than this, it would have collapsed and its economy would have become a thing of the past! But America does not care about debt because it is an internal problem for it; Congress raises the debt ceiling whenever it wants, and its economy continues. It pays off the debt with its economic power if it exists, otherwise, it issues banknotes without restrictions like other countries. The collapse of the American economy would only occur if a state appeared that gave no weight to the American dollar, but rather dealt with it either by bartering goods for goods or by returning to the gold and silver standard in currency exchange.
Thus, the leader of the democratic capitalist camp proves the failure of the democratic capitalist system. It is nothing more than the control of the ruling capitalist class over the necks of the people, especially the middle class and particularly the common people. Obama made his cause the "Obamacare" project under the pretext that it helps millions of people with health insurance, but in return, he suspended the work of hundreds of thousands of workers on unpaid leave...! This means that the Democratic Party is not driven by this law to serve the people, but rather for future electoral purposes. Otherwise, how can serving the people result in depriving them of their jobs through no fault of their own? For the Republican Party, the issue is not about health insurance or the lack thereof, but rather that the project should not be attributed to its rival alone, but that it should share in it... The two parties do not care about the healthcare of the people, evidenced by their agreement to pass the project after negotiating it so it can be attributed to both parties. The criterion is not its content, but its electoral feasibility, even if it results in misery and hardship for the people! Likewise, the project contained an article requiring large companies to provide health insurance for their members. The author of the project himself, Obama, announced last July his desire to postpone this article for a year—the one related to large companies providing health insurance—to please these companies and their supporter, the Republican Party, thinking that the Republican Party would then agree to his project... From this, it is clear that neither party has any concern for correctly managing the people's affairs as much as they care about gaining "electoral popularity." All of this shows that their capitalism is the capitalist's exploitation of the masses to increase his capital, and their democracy is not to serve the people, but for the people to serve the "big" owners of democracy, even without pay!
In conclusion, we praise Allah that we are Muslims, and that Allah Almighty has guided us to a system from the All-Wise, All-Aware... The Caliph goes hungry if the subjects go hungry, and he is satisfied when they are satisfied. He does not feel secure until they feel secure... A system that guarantees the fulfillment of basic needs—housing, clothing, and food—for all members of the citizenry. For those who can work, work is provided; for those who cannot and have no relative to provide for them, the Caliph is their guardian and provides for their maintenance in a recognized manner... A system in which public property is distributed to the people to preserve their security and livelihood, so their allowances are distributed to them from birth... A system that achieves a secure and just economic life that corrects the affairs of the creation. For the Creator, glorified and exalted be He, knows best what is good for the people:
أَلَا يَعْلَمُ مَنْ خَلَقَ وَهُوَ اللَّطِيفُ الْخَبِيرُ
"Does He who created not know, while He is the Subtle, the Acquainted?" (Surah Al-Mulk 67:14)
We ask Allah Almighty for help and success in restoring the Righteous Khilafah (Caliphate), so that goodness may prevail not only in the Abode of Islam (Dar al-Islam) but also for everyone who possesses a mind and loves security and peace... And all praise is due to Allah, the Lord of the worlds.