The concessions Republican House Speaker John Boehner has had to make to get his party's far-right tea party wing to pass a meaningless bill to raise the nation's debt ceiling is emblematic of the craziness surrounding what has become a huge and damaging crisis of confidence in the U.S. dollar, in America's political stability, and this nation's good faith and credit. But that is just the tip of the iceberg headed toward the Tuesday deadline.
What is really at stake is the very foundation of the fairness, ideals and values long held in America with respect to our vast majority of working families, who depend heavily on their hard-earned entitlement programs and the flat-lined, modest (15 percent) of federal spending that supports discretionary support for everything from farm crops to Pell grants.
At the most fundamental level, what tea party members are demanding -- and holding our nation's economy and good faith and credit hostage for -- comes down to things like this:
• Cutting Pell grants for low-income students to attend college, in return for keeping the Bush tax cuts intact for multimillionaires and billionaires.
• Making measly voucher programs out of bedrock, pre-paid Social Security and Medicare, in return for keeping tax breaks for oil companies, and personal taxes for zillionaire hedge fund managers at a lower percentage rate than what their secretaries pay.
• Whacking Medicaid, which funds most nursing home care and barely provides minimal health care for the very poor (and none for the working families without insurance if their incomes are a little above the federal poverty guideline), in return for keeping corporate tax breaks for big multinational companies that earn billions in profits, that park their jobs and profits off-shore, and that often pay zero federal taxes.
In short, the tea party types are demanding cuts that would throw the vast majority of American families to the wolves by slashing any meaningful help at leveling the playing field for working families, just so they could say they refused to allow any revenue increases to help work down the federal debt they so abhor.
We still have to wonder if these tea party types, and their uninformed middle-class supporters, know precisely how the country arrived at the current $14.3 trillion federal debt. If they don't, here's a short primer: Ronald Reagan raised the existing 1981 debt of $1 trillion to $2.9 trillion before he left office. George H.W. Bush raised it $1.5 trillion more. Bill Clinton added another $1.4 trillion in debt, even though he ended his second term with three years of budget surpluses.
George W. Bush, the debt king, raised the $5.8 trillion debt that he inherited in 2001 by $6.1 trillion -- to a total of $11.9 trillion -- mainly by borrowing to pay for his huge tax cuts that disproportionately benefited the wealthiest Americans, for his wars in Iraq and Afghanistan, and for the unfunded Medicare prescription bill.
The debt and borrowing he put in motion for his tax cuts and wars, plus his $800 billion TARP bill, added another $1.2 trillion in debt to the budget he left Barack Obama for his first year in office in 2009 -- boosting total debt from the Reagan-through-Bush II era to $13.1 trillion. The Bush II tax cuts, wars and Medicare drug bills, of course, continue now to add debt to the federal budget every day.
Thus, of the $2.4 trillion in new debt for Obama's 2009/10/11 budgets, the lion's share is inherited from the fiscal actions of Bush II. Obama's stimulus spending of $800 billion -- most of which went for new temporary middle-class tax cuts and a three-year aid program to help stabilize state budgets -- actually constitutes relatively little of the current $14.3 trillion federal debt.
The history of the debt doesn't matter to lenders who hold Treasury bonds. What they know is that the United States government adopted fiscal policies and Congress approved appropriations over the past three decades that it financed by selling U.S. Treasury notes. Debt holders also know that Washington -- unless tea party types wake up -- may now default on its debt for the first time ever.
That disastrous, historic action would immediately lower America's credit rating, erode confidence in America's word, and raise interest rates by at least 1 percent, immediately adding $1.3 trillion to the federal debt -- just for starters.
It would also sabotage the economy, throwing the nation back into a deeper recession, further increasing automatic federal spending for unemployment and health care, and generally wreaking havoc for America's businesses and jobs.
Tea party types would work the nation into this deeper hole, with all its fresh pain for so many millions of families, all because their witless, reckless tribe doesn't have the sense of responsibility to make good on the nation's financial promises pledged over the least 30 years, mainly under Republican presidents. This would be tragic, mindless and, of course, needless self destruction, all in the name of political theater under the ironic banner of fiscal purity.
Nothing could be more cruel to ordinary American families.