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3:41 pm
Sat January 5, 2013

Week In News: The End Of The Fiscal Cliff, Sort Of

Originally published on Sat January 5, 2013 4:10 pm

Transcript

(SOUNDBITE OF MUSIC)

JACKI LYDEN, HOST:

It's WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Jacki Lyden.

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PRESIDENT BARACK OBAMA: If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic. The last time Congress threatened this course of action, our entire economy suffered for it.

LYDEN: That was President Obama today speaking in his weekly address. Earlier this week, a Congress that seemed almost under siege from its own factions narrowly averted the fiscal cliff. The process is considered only a prelude to battles to come on various financial deadlines and might be expected to raise questions about America's economy and governance. James Fallows of The Atlantic joins us, as he does most Saturdays. Nice to have you back, Jim.

JAMES FALLOWS: Thank you, Jacki.

LYDEN: So I know that you caught a lot of this spectacle on television, and we were wondering and talking a bit about whether or not this has left the full faith and credit in the U.S. Treasury and government intact globally.

I think the world financial reaction this last week puts this whole question in a very different light from the way we're used to discussing it in American politics. We saw that in the immediate aftermath of the fiscal cliff averting deal the Congress and the president struck this past week, there was a stock market surge around the world. You know, the Dow Jones average went up 300 some points, and there were positive reactions in the European and Asian markets.

FALLOWS: And you would think that if the world's concern about the U.S. was what we had mainly heard over the last couple of years, which is that we're becoming too indebted, that we're not going to be able to meet our federal obligations, that we're becoming another Greece, the reaction would have been the reverse because the effect of this fiscal cliff deal was actually to make the federal deficit larger than it would've been if there was no agreement.

LYDEN: In fact, it actually added 4 trillion to our debt.

FALLOWS: Exactly. And so the fact, this positive response suggests that what the rest of the world was concerned about was not really the level of federal debt but whether we're going to sort of engineer our way into another recession, which would affect the rest of the world, and number two, the basic process of how the United States is able to do its public business. And I think this latter point is the one that really weighs on the rest of the world.

LYDEN: Jim, let me move to Afghanistan. I know you posted a blog post today in The Atlantic about the outcome there. I don't want to use the phrase graveyard of empires, but it seems as if the U.S. is facing a situation similar to what the Russians encountered.

FALLOWS: I will make clear that I am not an expert in Afghanistan. I've not been to visit the battlefield there over the past 10 years. But from having studied the American record in various wars of the past generation plus and read the history of that part of the world, anyone would have to be concerned about the omens coming out of Afghanistan over the last year or two.

Many people have noted that in 2012, twice as many U.S. troops were killed by the Afghan soldiers they were supposedly training as the year before, the level of hostility from the Karzai government itself, which is (unintelligible) our ally, and the Afghan public seems to be going up.

The oddest thing about this from American politics is that it's not a more central topic of discussion now of what the United States is going to be able to do to wind up its business there when we face this dilemma. It's difficult to get out when we haven't trained a successor force. But it also is very difficult and even impossible to stay when the hostility seems to be growing so quickly.

LYDEN: And speaking of underwhelming and less than dramatic outcomes, this week, the Arab news channel Al-Jazeera bought former Vice President Al Gore's cable network, Current TV. That was rather remarkable, $500 million deal.

FALLOWS: It was. And one often thinks of Al Gore as a person who, over the last 12 years, must have reflected on the injustice of life in various ways. But as a businessman, he's been phenomenally successful, including the $100 million that he personally reportedly will make from this deal. As somebody who's watched Al-Jazeera coverage a lot as I have from outside the United States over the last few years, I think American viewers will be positively surprised by what they see in the news coverage from this network. It's another strand of coverage and more informative than many people might think.

LYDEN: James Fallows is national correspondent with The Atlantic. And you can read his blog at jamesfallows.theatlantic.com. Jim, nice to have you with us.

FALLOWS: Thank you, Jacki. Transcript provided by NPR, Copyright NPR.