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...the other day when one of the Tea Party Express performers mentioned that the Standard & Poor's credit downgrade was being blamed on the tea party wing of the Republican Party.
The crowd loved it.
Perhaps they simply didn't understand what just happened. Perhaps they tend to blurt out "yay!" every time the tea party moniker is mentioned in public, like when a rock star mentions your home town during a concert. But I tend to go with Occam's Razor on this. The simplest explanation is the most likely one: they were thrilled that our credit rating was downgraded because, in keeping with the plan, it would damage the economy and, thus, the president. So they decided to let out a spontaneous and collectively gleeful yalp.
On Monday, the market suffered its sixth largest decline ever. On Wednesday, its ninth largest decline ever. Based on simple economic principles, I fear this is only the beginning. The spending cuts demanded by the Johnny-come-lately Republican austerity obsession will create further havoc with declining GDP and rising joblessness.
As superlative as that might sound, it's not quite emphatic enough. The Republicans, inclusive of the tea party, have been orchestrating another economic decline knowing that it will damage the president's re-election chances as well as the perceived efficacy of Democratic economic policies. Put another way, the Republicans are threatening your personal well-being in order to defeat the president, and they've just completed the latest successful attack in their economically bellicose strategy.
The primary evidence exposing the sabotage is their demand for deficit and debt reduction at this point in the recovery from the Great Recession and their calculated ignorance about the impact of the president's initial stimulus plan.
Check the record. Deficit reduction in a slow growth high-unemployment economy has only ever caused the economy to recede. While, yes, the Republicans are dangerous and often feign ignorance, they're not stupid. Despite what they say, they know budget cuts will hurt economic growth in this specific climate. How do they know? History. As I wrote last week, 1937 is the best historical evidence of deficit reduction causing an economic back-slide.
What else does history show us? The bulk of the deficit is the result of Republican policies. This is an indisputable fact. Hubris and a "starve the beast" spending policy lead to record price tags for Iraq and Afghanistan, the TARP bailouts and, finally, the massive Bush tax cuts (graph). Adding the fiscal consequences of the recession to the tally and there it is: the federal budget deficit.
I only point out the Bush record to emphasize a crucial point in this sabotage argument, and we've all talked about this at some point or another so I'm not breaking any news when I repeat the observation that the Republicans only became concerned about the deficit when President Obama was inaugurated. Prior to that, I can't recall a single tea party austerity rally or floor speech demanding an end to "out of control spending." But when the president had no choice but to spend our way out of a worsening recession, the Republicans brandished their tri-corner hats and denied they had anything to do with the recession or the deficit.
The biggest secret you'll never hear from the Republicans (or, sadly, the Democrats for some reason) is that the deficit has been slowly shrinking as modest growth has boosted revenues -- a reality that proves the point that stimulus, leading to increased economic prosperity, leads to more tax revenue and, therefore, deficit reduction, even when spending remains higher than normal. Fact: President Obama and the Democrats reduced the deficit by $120 billion in their first fiscal year, down from the last Bush fiscal year. By the end of the president's first term, the deficit, even without the debt ceiling deal, is projected to be $300 billion less than Bush's final deficit. The math doesn't lie. But the Republicans do -- about the president's deficit and about their own spending record.
Irrespective of the Republicans brazenly and hypocritically accepting stimulus money and federal earmarks, the stimulus absolutely worked in relation to its dollar value and the size of recession itself, which turned out to be far deeper than was known at the time. As soon as the stimulus was signed -- almost to the day -- the stock market began to steadily rise, GDP turned around and, within a few quarters, was growing again and job losses began to be erased, with fewer each month. Had the stimulus been larger, the positive effects would have obviously reflected that. But once the money began to run out and the demands for austerity began to be taken seriously, growth and job creation slowed. And this week, following the debt ceiling deal which will cut trillions from the budget, the markets tanked and a second recession has the nation on tenterhooks. The Republican sabotage plan in motion. (It's also worth mentioning here that the other "evil" source of Democratic "spending", the Affordable Care Act, actually reduces the deficit, according to the Congressional Budget Office. Yet the Republicans were screechingly opposed to it, despite the deficit reduction and its close resemblance to healthcare plans proposed by Bob Dole and passed by Mitt Romney.)
Deficit reduction is absolutely necessary. But not yet. Not when the world economy hangs in the balance. But now, with austerity dominating the legislative agenda and the common wisdom in Washington, all safety nets have been stripped away, leaving nothing between us and a protracted nightmare of worsening joblessness, poverty and despair -- oh, and another Republican president and another Republican Congress, which will likely be responsible for racking up more deficits and debt with continued tax cuts for the super rich while blaming the awfulness on the Democrats.
Maybe we should give the benefit of the doubt to the tea party picnickers who were cheering for the credit downgrade the other day. After all, they were only following the leads of Mitch McConnell, who has been repeatedly open about his sabotage plan, stating that his goal is only to defeat the president no matter what, and House Majority Leader Eric Cantor, who is quite literally betting against the American economy by shorting government bonds. The Republicans have nothing to lose and everything to gain, and the facts prove them to be culpable of orchestrating what is arguably the most heinous and destructive Republican political scandal in American history.
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The crowd loved it.
Perhaps they simply didn't understand what just happened. Perhaps they tend to blurt out "yay!" every time the tea party moniker is mentioned in public, like when a rock star mentions your home town during a concert. But I tend to go with Occam's Razor on this. The simplest explanation is the most likely one: they were thrilled that our credit rating was downgraded because, in keeping with the plan, it would damage the economy and, thus, the president. So they decided to let out a spontaneous and collectively gleeful yalp.
On Monday, the market suffered its sixth largest decline ever. On Wednesday, its ninth largest decline ever. Based on simple economic principles, I fear this is only the beginning. The spending cuts demanded by the Johnny-come-lately Republican austerity obsession will create further havoc with declining GDP and rising joblessness.
As superlative as that might sound, it's not quite emphatic enough. The Republicans, inclusive of the tea party, have been orchestrating another economic decline knowing that it will damage the president's re-election chances as well as the perceived efficacy of Democratic economic policies. Put another way, the Republicans are threatening your personal well-being in order to defeat the president, and they've just completed the latest successful attack in their economically bellicose strategy.
The primary evidence exposing the sabotage is their demand for deficit and debt reduction at this point in the recovery from the Great Recession and their calculated ignorance about the impact of the president's initial stimulus plan.
Check the record. Deficit reduction in a slow growth high-unemployment economy has only ever caused the economy to recede. While, yes, the Republicans are dangerous and often feign ignorance, they're not stupid. Despite what they say, they know budget cuts will hurt economic growth in this specific climate. How do they know? History. As I wrote last week, 1937 is the best historical evidence of deficit reduction causing an economic back-slide.
What else does history show us? The bulk of the deficit is the result of Republican policies. This is an indisputable fact. Hubris and a "starve the beast" spending policy lead to record price tags for Iraq and Afghanistan, the TARP bailouts and, finally, the massive Bush tax cuts (graph). Adding the fiscal consequences of the recession to the tally and there it is: the federal budget deficit.
I only point out the Bush record to emphasize a crucial point in this sabotage argument, and we've all talked about this at some point or another so I'm not breaking any news when I repeat the observation that the Republicans only became concerned about the deficit when President Obama was inaugurated. Prior to that, I can't recall a single tea party austerity rally or floor speech demanding an end to "out of control spending." But when the president had no choice but to spend our way out of a worsening recession, the Republicans brandished their tri-corner hats and denied they had anything to do with the recession or the deficit.
The biggest secret you'll never hear from the Republicans (or, sadly, the Democrats for some reason) is that the deficit has been slowly shrinking as modest growth has boosted revenues -- a reality that proves the point that stimulus, leading to increased economic prosperity, leads to more tax revenue and, therefore, deficit reduction, even when spending remains higher than normal. Fact: President Obama and the Democrats reduced the deficit by $120 billion in their first fiscal year, down from the last Bush fiscal year. By the end of the president's first term, the deficit, even without the debt ceiling deal, is projected to be $300 billion less than Bush's final deficit. The math doesn't lie. But the Republicans do -- about the president's deficit and about their own spending record.
Irrespective of the Republicans brazenly and hypocritically accepting stimulus money and federal earmarks, the stimulus absolutely worked in relation to its dollar value and the size of recession itself, which turned out to be far deeper than was known at the time. As soon as the stimulus was signed -- almost to the day -- the stock market began to steadily rise, GDP turned around and, within a few quarters, was growing again and job losses began to be erased, with fewer each month. Had the stimulus been larger, the positive effects would have obviously reflected that. But once the money began to run out and the demands for austerity began to be taken seriously, growth and job creation slowed. And this week, following the debt ceiling deal which will cut trillions from the budget, the markets tanked and a second recession has the nation on tenterhooks. The Republican sabotage plan in motion. (It's also worth mentioning here that the other "evil" source of Democratic "spending", the Affordable Care Act, actually reduces the deficit, according to the Congressional Budget Office. Yet the Republicans were screechingly opposed to it, despite the deficit reduction and its close resemblance to healthcare plans proposed by Bob Dole and passed by Mitt Romney.)
Deficit reduction is absolutely necessary. But not yet. Not when the world economy hangs in the balance. But now, with austerity dominating the legislative agenda and the common wisdom in Washington, all safety nets have been stripped away, leaving nothing between us and a protracted nightmare of worsening joblessness, poverty and despair -- oh, and another Republican president and another Republican Congress, which will likely be responsible for racking up more deficits and debt with continued tax cuts for the super rich while blaming the awfulness on the Democrats.
Maybe we should give the benefit of the doubt to the tea party picnickers who were cheering for the credit downgrade the other day. After all, they were only following the leads of Mitch McConnell, who has been repeatedly open about his sabotage plan, stating that his goal is only to defeat the president no matter what, and House Majority Leader Eric Cantor, who is quite literally betting against the American economy by shorting government bonds. The Republicans have nothing to lose and everything to gain, and the facts prove them to be culpable of orchestrating what is arguably the most heinous and destructive Republican political scandal in American history.
More
