It was beginning to look as if the political divisions in the country had become so deep that the US political system itself had become paralysed. If that were to happen, the entire world would suffer.
Party discipline is very weak in the US for a number of reasons.
Because party “headquarters” thus has little or no influence over who is selected as a party candidate for the House ,the penalty to a House member for voting against the national interest is low, while that of voting against the interests of his/her constituents or big donors is very high indeed.
Party discipline was not always as weak as it now is, but” reforms” introduced in the 1970s have made the system more “democratic”, but less manageable.
Part of the compromise agreed between Democrats and Republicans will mean automatic cuts in Defence and healthcare for the elderly if Congress is unable to agree on alternative cuts.
In the medium term, this means that US military capacity will reduce, and will be more focussed on America’s own immediate interests.
Europe will have take more responsibility for its own defence, and work out what threats it wants to equip itself to deal with on its own, and what threats it will simply have to ignore. Adventures, like the bombing of Libya, will require a bit more thought. The defence provisions of the EU Treaties may acquire a higher profile, and NATO may become less important.
The cuts in healthcare entitlements hopefully force reductions in the costs of health services, which are much greater in the US than they are in Europe. Vested interests in medicine and law have driven American health costs up to a completely unsustainable level.
But by coming so close to the brink of default, Congress has created uncertainty about the reliability of US securities. This may lead to higher interest rates in the United States. That could have a knock on effect on borrowers in Europe because the interest rates on US Federal bonds set the floor for interest rates.