When the Tea Party Express's Shea King told a likeminded Wisconsin crowd that "they are blaming the credit downgrade on the Tea Party," her audience erupted in proud cheers. Why? Because the Tea Party, like Harold Camping's now-disappointed followers who bought his promise that the Apocalypse would happen in May, have been preaching about the coming doomsday for some time now: America is on the verge of collapse and new leadership is needed to (at best) change course before it's too late or (more likely) deal with the aftermath. The more bad news only confirms these convictions. Who can blame them for cheering? You know those people who took Glenn Beck's advice and stocked up on gold? They can smile today.
Now in a time of actual crisis -- the weeks of brinksmanship over the debt ceiling followed by Standard & Poor's dropping the U.S.'s credit rating from AAA to AA+ -- the Tea Party is now running on a feedback loop: the more signs that the country will collapse, the more supporters they get. In the run-up to the debt crisis, Tea Partiers were arguing that we should risk immediate economic calamity by not raising the debt ceiling because of the much longer-term threat of economic calamity from overspending. As The New Yorker's James Surowiecki writes, big business--some of whose leaders funded the Tea Party in last year's elections--should fear the movement and its seeming appetite for economic destruction.
This approach may well be extended to bargaining over budget resolutions as well, with Republicans threatening a government shutdown unless they get what they want. If that sounds improbably reckless, consider that every Republican Presidential candidate except Jon Huntsman came out against the final debt-ceiling deal. Even if you explain this as pandering to Tea Party voters, there's no ignoring the fact that these candidates were advising congressional Republicans to let the United States default. Once games of chicken become the accepted way to resolve budget issues, the U.S. economy will become a much riskier place.
- It cuts spending on infrastructure, research, and defense.
- It made clear that there will be no stimulus spending to help prevent recession.
- It makes it even less likely the Federal Reserve will loosen up its monetary policy.
- Its austerity policies will hurt rich people, who now get so much of their income from jobs and the stock market.