Safely perched in the obscurity of Wellington, it’s with a strange combination of boredom and fascination that I’m watching the US budgetary showdown, a bid by the Republicans to force the Obama administration to dial back state healthcare spending. This is because as a former markets reporter, I know almost with a certainty that one side will blink before too long.

One only has to look at the extreme haircuts private bondholders accepted to prevent Greece from defaulting a few years ago, to be able to extract some certainty that the US will lift its debt ceiling and make good on its debt payments. It is, quite simply, too big to fail.

Perhaps that explains why investor reaction has been so muted, with the Standard & Poor’s 500 Index having chalked-up only modest declines so far. The fascinating part comes when looking at the size of the US fiscal dilemma.

As of October 8, US Federal debt stood at about US$16.7 trillion. Putting that into more manageable terms, it represents $52,883 for each person in the “world’s richest country”.

But don’t get your hopes up of Americans paying that back anytime soon, even if the Republican bid to cut Federal spending by stymying “Obama-care” works as intended (early indications suggest it may backfire).

Firstly, according to the Roosevelt Institute (a Keynesian group) the US federal government has been in debt every year since 1776, barring one brief exception. Secondly, as a general rule the worst spenders are Republicans, not Democrats.

It seems Americans have no appetite for real budget surpluses despite what they say.

Meanwhile, in New Zealand, the government announced that thanks to a bigger corporate tax take and lower spending on the Canterbury rebuild, it had more than halved its operating deficit before gains and losses to $4.41 billion in the 12 months ended June 30.

That’s put it on track to deliver a budget surplus in 2015, a position the Americans haven’t been in since Bill Clinton was in office.

That fiscal prudence will have to be ramped-up if we’re to return the government accounts entirely to the black, and cope with the massive blow-out in spending that’s expected as an increasing number of baby boomers hit retirement age (as previously discussed).

Even so, it’s pretty solid proof of Finance Minister Bill English’s steady hand at the economic tiller – one I think all New Zealanders are pretty happy with, especially when looking at the North Americans.