October 13, 2013

Why Now Is Crunch Time For The "Tea Party"

I've suddenly realized the behind-the-scenes situation making "tea party" Republicans in Congress so ardent to do-everything-now, why we hear "we can't wait any longer."   It really is crunch time for the Tea Party.

You see, the problem is They've Got No Time Left.

Every economic belief they are based on is becoming like sinking ground.

And it's not about the Affordable Care Act (Obamacare).

One very uncomfortable bit of information slowly seeping into national awareness (and around the world) is that the U.S. stimulus worked much better than the experience of nations going the route of austerity.   As time passes, years now, we are doing better, and big inflation is nowhere in sight, and....  And there is something even worse for the Tea Party...(just keep reading).

But first, look at the real effect of the Stimulus.

Want to know what the U.S. would look like now without the Stimulus of 2009-2011?

To see a nation with many parallels to the U.S. consider Spain: housing boom, housing bust, rising deficits due to falling tax revenues and unemployment supports....but then an interesting difference.

What Spain did next was not a sustained Stimulus like the U.S., with support of central bank Quantitative Easing (QE).  No.

Too soon Spain chose austerity.  And Spain also wilted under the austere (and foolish) European Central Bank which acted as the U.S. Fed did in the early 1930s.  Result?  Spanish unemployment topped out around 27%, recently.....

So, little stimulus, no QE....and plenty of cutting spending results in....  A Spanish Great Depression (II).

But that's not the worst of it for the Tea Party....

The Tea Party has been a message.

They've relied on a story that our "debt is unsustainable" and that we "can't continue like this."

More than anything, this is their story, their message, their crucial one leg to stand on.

And it turns out this proposition is demonstrating itself false, and this new fact is just now becoming visible to careful observers:

As China and other nations have been selling US Treasuries on net for months this year, and interest rates have stayed low, low, low.....

Let me summarize that: massive deficit spending, years of QE, and.....very little inflation, and finally China and the world were selling U.S. debt for months (instead of buying it), and the result is....continuing low interest rates!

The tea party story is just false.

Full stop.

So, perhaps unconsciously, perhaps with some internal party alarm already send through the trenches, the tea party "conservatives" rightly know they have little time until the public begins to become aware of the complete falsehood of their main idea.

Whether it is conscious or unconscious, they feel they need to Act Now, so that they will be able to pretend or believe, later, that the amazingly low interest rates on U.S. Treasuries (our national debt) are due (after the fact) to tea party resolve to improve the budget of the U.S.

That this will be completely false will be beside the point.  (Unless an articulate someone can wake up independent voters to this fact.)

And that such a fast rate of reduction in federal expenditures actually slows economic growth is also beside the point.  Everything is beside the point.

They need to move quick, and then take credit.  It is about public perception, and keeping up appearances.

They need to keep fooling some of the people all of the time.

1 comment:

  1. I have a different take.

    Read here: http://hurryupharry.org/2013/10/10/american-rightists-putin-continued/#comment-1077877117

    The tea party has been promising government shut down since at least 2010 and they weren't giving the ACA as the reason, or ANY reason. Blackmail is their only power, because they've made the Republican party no longer nationally electable and the whole Republican party knows it.