The Tea Party channels Ronald Reagan
July 12, 2011 | The chickens have come home to roost. The impasse in Washington over the budget and the debt ceiling is the latest battle in a war against the government begun back in the days of Ronald Reagan when the "starve the beast" strategy was born.1 The idea was that people would never agree to reducing government services, so by enacting popular tax cuts programs could be slashed later as a necessity of not having sufficient funds. "The beast" — the government — would be starved to death. We've seen how well that worked out — instead of slashing programs the government has instead borrowed money to keep the programs going.
Reagan's acolyte, Grover Norquist, founded Americans for Tax Reform, an extreme right-wing advocacy group. Norquist is famous for the quip, "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."2 Norquist also holds a scimitar over the heads of virtually the entire GOP in the form of The Pledge,3 vowing to never raise taxes, and in Norquist's mind, even eliminating a tax loophole is a tax increase.
The Tea Party has taken up the "no-tax" crusade with a vengeance. It is largely their intransigence that caused John Boehner to back away from the "grand bargain" he was willing to strike with Obama in which massive spending cuts, and raising the debt ceiling, would be traded for modest revenue enhancements. But the Tea Partiers, to a great extent creatures of Eric Cantor,4 won't have it. No way, no how.
Recent polling by the Washington Post and Pew Research Center turned up some alarming findings.5
All that certainty about knowing what will happen if the debt ceiling isn't raised is very troublesome, to me at least. I don't know what will or will not happen if the US defaults. But I was impressed by Treasury Secretary Timothy Geitner's explanation on Sunday's Face the Nation: "I have to write 80 million checks a month to Americans." He went on to say that if the debt ceiling is not raised then the only thing he can write checks on is cash the government already has and cash that comes in. That is, no credit. How many of those chuckleheads in Congress live without credit cards? Robert Samuelson provided a helpful breakdown of those checks (2010 data):6
Suppose the Treasury stopped issuing those checks? The Tea Party may think it knows what would happen, but they may be the only ones. No reputable economist that I know of claims to know. At the very least, the economy, the markets, and the financial system are likely to erupt in chaos. Not pretty.
So now we have a "perfect storm" that makes it virtually impossible to do what everybody knows has to be done: raise the debt ceiling and over the longer term increase revenue some and reduce spending some.
Back in the days of the Cold War, the Soviet Union and the United States amassed nuclear weapons on the theory of Mutually Assured Destruction (MAD). Any use of the weapons would surely result in both countries destruction, so their deterrent effect really came from each side trying to make the other side believe they were just crazy enough to use them.
That's where we seem to be with the debt ceiling. The President, sworn to "preserve, protect and defend the Constitution of the United States," can't possibly allow the government to default on its debts, and he has to be scared sleepless that the Republicans are just crazy enough to do it. At the same time, Mitch McConnell, John Boehner, and Eric Cantor have to believe that Obama is just crazy enough — or scared enough — to let them gut the government as they want to do.
Woe are we.
Last updated on Jun 4, 2016