The biggest threat facing the United States today may be the monumental ignorance of the tea party Republicans who have captured the once-great Republican Party. While economists and financial experts on Wall Street are uniformly warning that failure to raise the nation’s debt ceiling would be a catastrophe that would send world stock markets into a nose dive, members of the tea party caucus in Congress are insisting it would be no big deal at all.
Who are we going to believe? All those people who have spent careers dealing with the intricacies of the economic system or someone like Ted Yoho, a freshman House Republican who bumped a 12-term Republican incumbent from his seat in last year’s GOP primary in Florida? Yoho is one of several “debt-ceiling denialists” in Congress, who has said failure to raise the debt ceiling would “bring stability to world markets.”
Well, that is an interesting idea, but that is not what the people who run those world markets say. They insist that a failure of the U.S. to pay its debts would -- as expressed in a Bloomberg News article -- “devastate stock markets from Brazil to Zurich, halt a $5-trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar, and throw the U.S. and world economies into a recession that probably would become a depression.”
There have always been folks in Congress who believe crazy things, but they have never been in charge of the place -- until now. Because the big majority of congressional districts are safe for incumbents, many Republican incumbents have nothing to fear from Democrats but a great deal to fear from challengers on their right. As a result, the most extreme conservatives are calling the shots and setting the agenda.
Which brings us to today. President Obama has been pushing House Speaker John Boehner to allow a vote on the Senate-passed continuing resolution to fund the government with no extraneous bits that would de-fund the healthcare law or demand other concessions from Democrats (who have already acquiesced to spending levels demanded by the Republicans). The assumption has been that the bill would be easily passed with votes from Democrats and from less militant Republicans who just want to get the government back to business. But that assumption seems to be wrong.
Even though they know keeping the government shut down is destructive, a number of these more moderate Republicans in the House (moderate being a very relative term in this case) have now made it clear they are not willing to split with their caucus. In other words, they are scared of being targeted by tea party zealots and ultra-conservative campaign funding organizations in the 2014 party primaries.
Given all of that, it seems more than likely that the government shutdown will roll right into the debt ceiling deadline later this month. And that is a big problem for everyone because the tea party Republicans have no motivation to budge from their position.
They will not budge because they think they are right and all the world’s economists and financial expert are dummies. They will not budge because they have been elected by a bunch of yahoos back home who think the American economic system is as simple as the budget of a family living in a double wide out in a swamp. They will not budge because they see a new economic order rising from the coming wreckage. They will not budge because they truly believe in some dangerously ignorant ideas.
My advice: Buy gold and stock up on canned goods and candles.