“The contested 2020 presidential election, brinkmanship over the debt limit to advance political agendas and failure to reach consensus on the country’s fiscal challenges are recent signs of the deterioration in governance,” Fitch said on May 24, while putting America’s credit rating on watch for downgrade.

That sentence deserved more attention than it received. A ratings agency suggested, out in the open, that America’s system of government is unraveling.

Fitch’s warning was generally brushed aside by lawmakers and markets alike, but 2023 isn’t 2011. This time was indeed different. As David Beers, the man who presided over the Standard & Poor’s decision to downgrade the US a dozen years ago put it during a recent interview with Goldman, “it’s hard to argue that political polarization has done anything other than continue to worsen.”

Beers was being generous. As Fitch gently pointed out (albeit without using words like “insurrection”), America very recently experienced a violent attempt to prevent a democratic power transition. In late May, as Republican lawmakers huddled with Joe Biden’s debt ceiling team to determine the conditions under which the US Treasury would be allowed to honor its financial commitments, Stewart Rhodes, the militia leader charged with seditious conspiracy for his role in the January 6, 2021 attack on the Capitol, was sentenced to nearly two decades in prison. “You, sir,” a federal judge told Rhodes, “present an ongoing threat and a peril to this country, to the Republic and the very fabric of our democracy.”

It’s worth noting that among the incumbent lawmakers who initially objected to Kevin McCarthy’s bid to become House speaker in January, 14 of 15 voted to overturn the 2020 presidential election. All of those lawmakers favored sustaining at least one objection to states’ 2020 results even after witnessing the riot Rhodes was charged with facilitating. Voting with them on that day in 2021 was McCarthy who, two years later, was compelled to prostrate himself at the feet of Trumpism to secure the House gavel in what I described as “a feat of self-abasement with almost no modern historical precedent.” As everyone with even a passing interest in markets pointed out, the leverage the House’s far-right flank secured over McCarthy in January virtually ensured that the forthcoming debt ceiling debate would be more perilous than previous standoffs.

That’s why this time was different. In no uncertain terms: There was a link between the violent attempt to usurp America’s democratic process and 2023’s debt limit deadlock. It was thus fitting that the most intense negotiations unfolded during a week of sentencing proceedings for nine militia members convicted not only of seditious conspiracy, but also of obstructing the very same congressional proceeding during which McCarthy voted with lawmakers who would later become his tormentors to challenge Biden’s electors.

None of that’s lost on ratings agencies. More importantly, it’s not lost on the rest of the world, even as the vast majority of the financial press seems unwilling to address the real problem in favor of nonsensical debates about America’s fiscal trajectory. Social Security can’t go broke. There’s no entitlement “crisis.” What there is, though, is an existential crisis of government that mirrors the dissolution of civil society in the US.

It’s incredible to me that even after witnessing an attempted coup, and even as the (now indicted) man whose rhetoric presaged it is once again vying for the presidency with what’s likely to be obsequious support from one side of the country’s political duopoly, the debate around 2023’s debt ceiling standoff overwhelmingly centered on pedantic budgetary talking points and familiar laments for the big lie (lowercase) that says debt and deficits matter for the US. Let’s be clear: What matters in 2023 is the Big Lie (uppercase).

I don’t doubt the existence of a deep-seated aversion to Donald Trump within the US political “establishment,” whatever that term means to you. Nor do I doubt the notion that senior FBI officials and the US intelligence community wish they’d intervened to prevent Trump’s presidency full stop. That said, Trump’s claims about the 2020 election are false. Categorically and unequivocally. Maybe something untoward went on. Maybe there was a conspiracy. But Trump didn’t present convincing evidence of any such thing, let alone evidence to support his claims of “massive” voter fraud. We can safely assume, given his penchant for showmanship, that we’ve seen all the “evidence” he was able to conjure, and what we’ve seen is a motley collection of conspiracy theories so ridiculous that if they were presented to an editor as satire, they’d be sent back to the humorist as too silly for intelligent people to find funny.

But a very large minority of the voting public believes in one (or more) of those conspiracies and those voters are represented in Congress, which is now a reflection of the most intense societal polarization since the Civil War. It beggars belief that lawmakers and voters willing to acquiesce to soft autocracy (and thereby willing to concede that “government of the people, by the people, for the people” has indeed “perished from the earth”) sincerely care about matters so comparatively trivial as fiscal policy unless the debate can be framed as an extension of America’s hopelessly fractious politics — grievance politics — more generally.

Of course, the debt ceiling has been groomed in recent years to be just that — a microcosm of the country’s broader societal divide. But most of those who participated in the long-running quest to weaponize the debate in the service of perpetuating intense partisanship didn’t foresee a literal civil war, only a figurative one. Well, you reap what you sow. And here we are. The debt ceiling — and thereby the threat of a US default, a deep recession and a global financial calamity — is inextricably bound up with an existential societal rift, forcing the Fitchs of the world to ponder a “deterioration in governance.”

In the context of America’s teetering democracy, the idea of Biden invoking the 14th Amendment to service America’s debt is deeply symbolic and tragically ironic. Section 4 of the amendment spoke to the inviolability of US debt incurred by the Union during the Civil War. It “reflected fiscal policy, but it also demonstrated strength and sturdiness, and suggested that the federal government’s stability should not be questioned, either abroad or at home by former Confederates regaining power,” historian David K. Thomson wrote for the Washington Post on May 16. “The statement to stand by the war debt signaled a commitment to the United States’ creditors and the durability of the republic into the future.”

A century and half later, the federal government’s stability is indeed being “questioned” both abroad and at home. Domestically, the “questions” (and that’s a polite euphemism) emanate from Republicans who, when it comes to social policy, have a lot more in common with Democrats of the Confederate South than they do with Abraham Lincoln. Writing for the Post on Memorial Day weekend, E.J. Dionne Jr. compared America’s current predicament to the circumstances which prevailed 150 years ago. “The arguments around the budget and the debt ceiling in 2023 reflect a similar interaction of fiscal issues and questions of social and political equality with the two parties largely switching sides,” he said.

As unsettling (if I were emotionally capable of intense feelings, I’d say “terrifying”) as it is, America in 2023 is experiencing a crisis of government that bears the hallmarks of the socioeconomic and political climate around the Civil War.

We shouldn’t forget that the country’s societal rift worsened in the mid-1980s, when the dawn of shareholder capitalism conspired with narratives about the purported virtues of limited government and the onset of hyper-globalization to accelerate the demise of the American middle-class, something I’ve documented extensively in these pages (see “Exiles On Main Street,” among countless other pieces on the subject published here over half a dozen years).

That dynamic came largely at the economic expense of the same rural, blue-collar, undereducated, lower-income voters Republicans have long courted with cynical appeals to Christianity and “American values.” Those voters were enlisted in an awkward coalition that included the wealthy business class. Republicans implicitly assumed they’d never have to actually do anything for anyone other than the rich. As Dionne Jr. put it, “the playbook is quite consistent: Harvest votes from less affluent social conservatives and pursue policies that benefit well-off economic conservatives.”

Then along came Trump, magnate-turned populist demagogue promising a voice to every downtrodden everyman who dutifully voted Republican for three decades with nothing much to show for it. It’s hard to admit when you’ve been duped, so tens of millions of Trump voters are still in thrall to a charlatan, leaving the GOP beholden to the specter of an angry mob, some of whom have demonstrated a willingness to overthrow the government.

In a way, it’s comeuppance for Republicans, but the rest of the country can find no solace in the karmic, intra-party usurpation of the business lobby by chronically exploited blue-collar voters because it’s not confined to the GOP. It’s spilling and boiling over and now threatens to crescendo in the dissolution of American government and of the Republic itself.

This needs to be taken seriously. “Governance is a weakness,” Fitch said of America relative to other top-rated countries. “The future direction of the rating is sensitive to the direction it takes.” The future direction of the world — indeed, of human history — is likewise sensitive.

[Editor’s note: I initially planned to publish a piece on the crisis in higher education for May’s monthly letter. As important as that issue most assuredly is, it felt a bit trivial in light of the circumstances in D.C. That piece (on higher education) will be published as June’s monthly letter.]