by Sandi Behrns
For many reasons, it can be assumed that the US economy will take a huge hit if the GOP regains control of Congress, as expected, in Tuesday’s election. Nobel Prize-winning economist Paul Krugman wrote an excellent piece on the subject in the New York Times last week. It’s highly recommended reading, but the money shot is this:
This is going to be terrible. In fact, future historians will probably look back at the 2010 election as a catastrophe for America, one that condemned the nation to years of political chaos and economic weakness.
Krugman points to a number of things as the basis for this pessimism: Mitch McConnell’s insistence (reiterated today) that the single most important goal for Republicans will continue to be destroying President Obama; tied to the attempt to defeat Obama, a continuing refusal to do anything to boost the economy; Tea Party influence pulling any moderate-leaning GOP legislator away from compromise; increased debt due to GOP instituted tax cuts; and the serious threat of a government shutdown.
While all of that is enough to make a good progressive cry, there is one more way Republicans could tank our economy, and bring the global economy crashing down with us. Bruce Bartlett noted in Saturday’s Fiscal Times
I hope I am wrong, but I don’t see any prospect of meaningful action by a Republican Congress that would reduce the deficit, and much reason to think it will get worse if they have their way by enacting massive new tax cuts while protecting Medicare from cuts. And as I have previously warned, I am very fearful that it will be impossible to raise the debt limit, which would bring about a default and real, honest-to-God bankruptcy — something many Tea Party-types have openly called for in an insane belief that this will somehow or other impose fiscal discipline on out-of-control government spending without forcing them to vote either for spending cuts or tax increases.
Where would Bartlett get this idea? From the Republicans themselves. Many Tea Party candidates are running on just such a promise, including Mike Lee who will more than likely be Utah’s next senator. In fact, RNC Chairman Michael Steele, appearing on CNN’s “State of the Union” on Sunday, said, “We are not going to compromise on raising more debt. We are not going to compromise on raising the debt ceiling.”
Just to be perfectly clear here, if Republicans retake the majority and block an effort to raise the debt limit, this tells the world that the United States isn’t in a position to repay its debts. We’re talking about an America in default. The practical effects could prove catastrophic to the global economy — that’s not hyperbole; that’s just reality.
Unfortunately, it appears to be too late to do much about this looming catastrophe. Our only hope seems to be a shock of sanity hitting this new batch of GOP legislators when they actually arrive in DC. At least progressives will have the bittersweet pleasure of being able to say “I told you so.”