Maybe Washington’s game of debt-ceiling chicken went on too long for comfort, but the resolution of the game looks a lot like a pragmatic compromise to me. Unless the bill fails, which it might, it looks like our democracy will have raised the debt ceiling, didn’t really cut a thing, passed off responsibility for substantial deficit reduction to a “super committee”, which will either come up with a plan that does not bind the future executive and legislature or will trip a “trigger” that won’t go into effect until after the next election, and then, again, will go into effect only if the government of the future wants it to go into effect.

Nothing is completely isolated, and “foreign affairs” no longer exists: everything has become national, even personal. Other people’s problems are now our problems, and we can no longer look on them with indifference, or hope to reap some personal gain from them. This is the context of our current peculiar vulnerability.

No plan under serious consideration cuts spending in the way you and I think about it. Instead, the cuts being discussed are illusory and are not cuts from current amounts being spent, but cuts in prospective spending increases. This is akin to a family saving $100,000 in expenses by deciding not to buy a Lamborghini and instead getting a fully loaded Mercedes when really their budget dictates that they need to stick with their perfectly serviceable Honda. But this is the type of math Washington uses to mask the incriminating truth about the unrepentant plundering of the American people.

Businesspeople who successfully seek political influence nearly always demand protection from the free market. They lobby for regulations and taxes (such as tariffs) that impose disproportionately heavy burdens upon their competitors and, hence, upon consumers. In doing so, such greedy businesspeople follow a course unmistakably opposite the course they’d follow were they really free-market ideologues.

As Jim Fallows notes, these blame games are really quite childish. In fact, most of what’s driving our current deficits is the economy, and the onrushing retirement of the Baby Boomers. Those are the things that are changing rapidly, not the size of the Bush tax cuts. If you want to blame it on anyone, blame Lyndon B. Johnson and Richard Nixon, but good luck getting any money out of their estates.

One can’t but reflect on the four years of government/media/establishment promises – backed by ghastly actions – that recovery is right around the corner. This rhetoric probably helped forestall the pace of liquidation and hence delay recovery more. The latest news will probably set the liquidation in motion at a faster rate as factories, homeowners, banks, and many other institutions finally throw in the towel and realize that their inventories, assets, and balance sheets need to reflect reality. And those young people who have put off taking the low-paying job in hopes of finding that high-paying job they were promised will similarly make new adjustments.

The debt dilemmas in Europe and the US prove yet again that elected officials will ignore long-run costs to achieve short-run benefits, and will act only when forced, in a doomed effort to circumvent the laws of economics and revoke the laws of arithmetic. And that implies an extended period of episodic economic disruption and political upheaval far beyond this summer’s debates on America’s debt ceiling and Europe’s distressed sovereign debtors. These debates represent just one round in an ongoing struggle, with vast political and economic consequences for years to come.

As economist Justin Wolfers tweeted this morning, economists have spent the last few months pondering the mystery of the jobless recovery. Well, it’s a mystery no more. We haven’t had a jobless recovery. We’ve had a recoveryless recovery.

Come what may, the US will always be the least dirty shirt in the hamper, despite Washington’s best efforts.