The Simple but Horrifying Fallacy at the Core of the Tea Party

This from "The Economic Populist", please follow link to original
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The Simple but Horrifying Fallacy at the Core of the Tea Party

Originally published on The Agonist

It’s hard to say if the Tea Party has an acknowledged leader, but someone who professes to be just that has chosen a very opportune moment to trash Speaker John Boehner’s attempts to craft legislation that would allow an increase in the debt ceiling. Judson Phillips, the CEO of Tea Party Nation, is the self-acknowledged head of the Tea Party, and in an editorial this morning in The Washington Post, he attacks Boehner’s legislation for providing “almost non-existent budget cuts.”

Phillips says:

As the founder of Tea Party Nation, I feel confident in saying that the Tea Party understands what so many in Washington seem to have forgotten: We do not have a debt crisis. We have a spending crisis. There is only one way you get to a debt crisis — you spend too much money.

Here is what is fundamentally wrong and dangerous with the core assumption of the Tea Party: There are two ways to get to a debt crisis – you either spend too much money or you don’t take in enough revenue. Anyone who has done a family budget or a business budget understands there are two sides to every discussion of cash flow: cash flow in, and cash flow out. In government terms, this equates to taxes received and expenditures made.

By taking one half of this equation out of the discussion, the Tea Party is dragging the nation along on a fantasy ride in which only spending cuts are allowed as a solution to the government’s debt problem. The danger in an approach which demands enormous budget cuts - $4 trillion is the number mentioned by the Tea Party – is that you expose the economy to a depressionary shock, especially since the Tea Party wants the cuts immediately. Immediate cuts of that size would be the equivalent of removing 25% of all cash flow out of the economy, throwing tens of millions of middle class Americans into acute financial stress. For many poor people, it would be an existential crisis, in which starvation becomes a real prospect.

What sort of person would deliberately ignore the obvious fundamental reality of any budget? Tea Partiers have been called crazy, “nutters”, reckless, irresponsible, and just plain stupid. I suspect they have bought into a partisan set of talking points that have been dogma for many years in the Republican Party. First, all taxes are bad, because they steal money from hard-working people and deprive businesses of the means of creating jobs. Second, government spending is generally bad because it makes people indolent and dependent on hand-outs. Third, deficits are bad because they stifle economic growth.

Tea Partiers are obviously creatures of the Republican Party. Fifty of them sit on the Republican side of the aisle in the House of Representatives. They pride themselves on attracting someone like Sarah Palin as a keynote speaker at their conferences. They get funding from right-wing special interest groups. They are partisan in their approach to politics, excoriating liberals and Democrats, and eager to push the Republican Party into their imaginary world where all government deficit problems can be solved simply by cutting and capping expenditures. In his editorial, Judson Phillips ascribes all of the spending problems to the “Obama-Pelosi-Reid axis of fiscal evil.” What happened to George W. Bush and his $300 billion annual tax cut, his unfunded wars, his drug company give-away, and his bailout of the banking industry? You are no longer dealing in fantasy when you ignore the president and party who in 2000 inherited a budget surplus and converted it into a $1 trillion+ deficit.

Party hack though he is, Mr. Phillips makes some good points about waste and fraud in the federal budget. These points are lost, however, in his one-sided mind set: he takes only the Republican side in the politics of the deficit debate, and then he requires that we look only at the spending side in the budgetary calculus. We could say that his approach helps no one, but in point of fact there are some beneficiaries, namely all the people who have direct access and influence with Congress so that they can get their taxes cut at the exclusion of everybody else. That would be wealthy people, and large corporations.

As much as the Tea Party likes to fancy itself as independent, it has become the radical wing of the Republican Party. It would be bad enough if the only thing the Tea Party might accomplish would be pulling the Republican Party to the fringe of radical conservatism, but it is doing more than that. It is holding the Republican Party hostage to its immensely dangerous concept that the only solution available to the federal deficit is to cut spending. The Republican Party in turn is holding the country hostage over the same profoundly simple error – that taxes cannot be raised as a matter of principle. When one party in a two-party system perpetuates and insists on such an appalling error, the people who are going to get hurt are the 99% of the population who no longer are represented in the Congress.