A US government shutdown could crash the recovery

Red alert.

Relax: the Russians are not about to invade! Washington, however, is staring at collapse: in mid-October, the Treasury has announced that it will be down to its last $30bn which, believe it or not, will only pay for half-a-day’s Federal expenditure. Yes, it’s that time of year again, when Washington stares at its Fiscal Cliff, as Congress must vote through the budget and the increased Total Federal Debt Limit.

This used to be an automatic agreement, but now it’s become a partisan issue between the Republican and Democrat parties. The problem is that the man in the White House is a Democrat president and the men of the Tea Party Republicans don’t like this at all. In particular they don’t like Obamacare, the President’s flagship policy, which begins enrolling the uninsured next Tuesday, as the rich will have to pay far higher taxes to pay for this universal healthcare for all, but especially for the poor.

So the Republicans argue that if the president wanted to bring in this hugely costly measure at a time of global economic recession and banking crisis, he should have cut other expenditures to pay for it. The president saw it differently: he was looking at higher taxes. Last year they struck a deal, which finally ended up with the Republican $80bn sequestration, or expenditure cuts, which hit the military procurement budget hard.

This year, however, the hard men of the Republicans are in no mood to compromise. They perceive a lame duck president, who has just lost a one-armed wrestling match with Vlad the Bad Putin over Syria. They perceive a chance to kill off Obama, Obamacare and the Democrats all in one go. They can see Hillary in the wings getting ready to stand, and the thought of Bill "I didn’t inhale!" back in their White House is just too much for them. This, they perceive, is their last chance but one to prevent the loss of four elections in a row – a calamity for the ageing, predominantly white GOP.

Who will blink first this time? If no one blinks, the US Federal government is bust and out of business. Washington will close and go into shut-down mode by lunchtime. It cannot pay its debts and cannot incur any more debts it cannot pay. The vote on all this is on Sunday, and it looks like a total impasse as we head for the weekend, with a 21-hour filibuster taking up all of last Wednesday.

What happens in a shut-down, the last of which was in 1996? Schools are shut, pensions aren’t paid and thousands of suppliers have to wait for their money. More seriously, the chances are that one of the many expenditures to be cut will be interest on Treasury Bills, which could wreak global market havoc, send interest rates sharply up and kill off the recovery, and even trigger the next banking crisis and a global depression. This is nasty, and could get serious, fast.

Stephen Hill writes for Spear's Magazine

This piece first appeared here.

Photograph: Getty Images

This is a story from the team at Spears magazine.

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It’s obvious why Thais can’t resist our English footballers. But they want our schools, too

The only explanation is . . . our footer must be great and exciting to watch.

At Bangkok airport, sitting in the Club lounge, as I am a toff, I spotted a copy of Thailand Tatler, a publication I did not know existed. Flicking through, I came across a whole page advert announcing that RUGBY SCHOOL IS COMING TO THAILAND.

In September, Rugby will open a prep and pre-prep department, and then, in 2018, full boarding for ages up to 17. How exciting – yet another English public school sets up a satellite in Thailand.

But I was confused. Just as I was confused all week by the Thai passion for our football.

How has it happened that English public schools and English football have become so popular in Thailand? There is no colonial or historical connection between the UK and Thailand. English is not the Thais’ first language, unlike in other parts of the world such as India and Hong Kong. Usually that explains the continuation of British traditions, culture and games long after independence.

When I go to foreign parts, I always take a large wodge of Beatles and football postcards. I find deprived persons all over the world are jolly grateful for these modern versions of shiny beads – and it saves tipping the hotel staff. No young Thai locals were interested in my Beatles bits, but boy, my footer rubbish had them frothing.

I took a stash of seven-year-old postcards of Andy Carroll in his Newcastle strip, part of a set given away free in Barclays banks when they sponsored the Premier League. I assumed no one in Thailand would know who the hell Andy Carroll was, but blow me, every hotel waiter and taxi driver recognised him, knew about his various clubs and endless injuries. And they all seemed to watch every Premiership game live.

I have long been cynical about the boasts that our Prem League is the most watched, the most popular in the world, with 200 countries taking our TV coverage every week. I was once in Turkey and went into the hotel lounge to watch the live footer. It was chocka with Turks watching a local game, shouting and screaming. When it finished, the lounge emptied: yet the next game was our FA Cup live. So I watched it on my own. Ever since, I’ve suspected that while Sky might sell rights everywhere, it doesn’t mean many other folk are watching.

But in Thailand I could see their passion, though most of them have no experience of England. So the only explanation is . . . our footer must be great and exciting to watch. Hurrah for us.

Explaining the passion for English public schools is a bit harder. At present in Thailand, there are about 14 boarding schools based on the English public-school system.

Rugby is only the latest arrival. Harrow has had a sister school there since 1998. So do Shrewsbury, Bromsgrove and Dulwich College (recently renamed British International School, Phuket).

But then I met Anthony Lark, the general manager of the beautiful resort where I was staying in the north of the island. He’s Australian, been out there for thirty years, married to a Thai. All three of his sons went to the Phuket school when it was still Dulwich International College.

His explanations for the popularity of all these British-style schools included the fact that Thailand is the gateway to Asia, easy to get to from India and China; that it’s relatively safe; economically prosperous, with lots of rich people; and, of course, it’s stunningly beautiful, with lovely weather.

There are 200,000 British expats in Thailand but they are in the minority in most of these British-style public schools – only about 20 per cent of the intake. Most pupils are the children of Thais, or from the surrounding nations.

Many of the teachers, though, are from English-speaking nations. Anthony estimated there must be about five thousand of them, so the schools must provide a lot of work. And presumably a lot of income. And, of course, pride.

Well, I found my little chest swelling at the thought that two of our oldest national institutions should be so awfully popular, so awfully far away from home . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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