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How The Tea Party Saved A Trillion And Cost Us Trillions More

Tea Party Republicans rejoiced when the debt ceiling deal was signed into law. On paper, the cost cutting will shave $1 trillion off of the national debt. However, nobody mentioned that there will be immediate and extremely damaging consequences to the nation’s and the world’s economies. When S&P downgraded the credit rating of the United States there were immediate consequences. Although some experts say that the change was a mere slap on the wrist and others believe that a single investment management company pressured S&P into making the change, we can already see adverse changes as a result of the Tea Party “victory”. Short term loans are going to cost more. The $1 trillion in savings over 10 years will be completely wiped out by the extra interest charges that the US government will have to start paying right now.

Even worse that that, in the seven days since the announcement of the deal, the world’s equity markets have lost $4.5 trillion in value and they are very likely to lose more in the next few days as the realization of what has happened sinks in. From now on, every time the debt ceiling has to be raised there will be another long and wasteful battle, not all of which can be guaranteed to be settled in time to avoid a total calamity. The Dow-Jones suffered its ninth largest drop in history yesterday. If the markets don’t rally soon we’ll be plunged into a second recession, possibly worse than the first, as we are in a much weaker situation now. This is fiscal irresponsibility at its worst.

Tea Party members seem to think that all of this is a good idea. They hope to “starve the Beast”, as President Ronald Reagan put it. They think that by cutting funding for government they’ll shutdown programs like Social Security, Medicare and Medicaid. They believe that they can oust President Obama in 2012 by making it seem that all of this is his fault, when President Bush singlehandedly almost doubled the nation’s debt.

What the Tea Party members don’t seem to realize is that the first people to starve will be ordinary working Americans, all of whom have seen the values of their houses and other assets drop in the past couple of years. Well done Tea Party morons! You’ve taken another great step in turning over our nation to the corporations and the very richest Americans. Why don’t you change your name to the Serfer’s Party? That’s what you seem to be bent on doing. Turning most of us into serfs.

Footnote: Later today, CNN reported that – “Though observers said S&P’s downgrade shouldn’t matter all that much, the market wasn’t buying it. ‘Investors are having one reaction to the downgrade: Sell first and ask questions later,’ said Paul Zemsky, head of asset allocation with ING Investment Management.”

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