Our country has come much to close to defaulting on our debt, but thankfully we will be saved literally in the final few minutes by last minute legislation which will push out the debt limits for another few months.

But let’s face it, there has been significant damage to this country’s reputation worldwide. We are moving closer and closer to becoming a banana republic, or worse. Some knuckle headed Republicans had a brilliant idea of keeping the government closed, and letting us default on our debt, unless Obamacare was repealed. Like that had any shot in the world of ever happening. Did they forget that Obamacare was already passed into law? Did they forget that there was a Presidential election that Obama won in which his health plan was a major issue? Did they forget the Supreme Court already said it is legal? The Republicans walked into a deathtrap with their eyes wide open and now they will pay the price and worse every US citizen will pay the price. Obamacare may turn out to fail, but that is not the point. We cannot have a minority party, and even a minority of that minority party, close down the United States of America over one piece of legislation that they do not like.

Do they not see the terrible precedent this would set? There has to be a sense of fair play so that we can operate like a normal functioning society. That is one thing that has always set us apart from the rest of the world.

A default would have been disastrous, make no mistake about it. We have avoided that. But we have not avoided the damage this will do to financial markets and to our reputation. There will be long term costs as interests rates will nudge higher due to higher risk premiums. And these costs will be huge. Can you really trust the USA to pay their bills on time in the future?

Oh, and by the way, shutting down the government for 16-days is also not a freebie. Standard and Poor’s estimates the cost at $24 billion. That is all, just $24 billion. That, plus the huge interest rates costs that will now trickle through the economy. And it all could have been avoided had we had a normal, functioning government.

And in a month or two the dysfunctional process will start again.

If we are not already there, we are headed on the road to becoming the new Banana Republic, and until we convince the world that we still are the USA and can govern like the USA, these self-inflicted economic costs will be painful.