Despite the fact that our $14 trillion debt was largely created by Teapublican presidents, now that we have a Democratic president, the Teapublican-controlled Congress is dead set on forcing enormous budget cuts at any cost.
Set aside for a moment that their primary agenda is to end regulations for their corporate masters and to starve only those departments that are contrary to their ideology (primarily the EPA and the Dept. of Education). The real concern is what such draconian cuts will do to our economy.
If you want to see a preview of the consequences, you need only to look to Greece.
As you likely know, the Greek government is in danger of default. To cure its ills, Germany along with the other nations that are part of the European Union, agreed to bail out Greece. But only if Greece would enact drastic spending cuts and large tax hikes.
The result? It would seem that the cure is in danger of killing the patient. Indeed, the cuts have put the entire European Union in recession. And the symptoms have spread to the US. Every time the European Union sneezes, our markets react.
The problem is that the new austerity measures have resulted in more Greeks losing their jobs. And without jobs, the Greeks are unable to pay the increased taxes. Many have been forced to pay taxes out of their savings (if they have savings). Many cant pay their taxes at all. That only results in more deficits, more spending cuts, more tax increases, and so on.
Although Greece is the most extreme example of an economy in trouble, its not alone.
Irelands economy is also particularly weak. You may remember that before the global recession, Ireland was called the “Celtic Tiger” having built its reputation by luring foreign corporations (many from the US) through some of the lowest corporate taxes in the world. Indeed, Teapublicans have repeatedly cited Ireland as a model for reforming our own corporate tax structure.
One would hope that our nation could learn from these examples of what not to do. But, since Teapublicans mostly ignore anything beyond our borders (except for oil deposits), Im not hopeful.