The individual is King here in America. Federal government is closed, and so far you’d hardly notice. Turns out people can live without the services of the Poet Laureate for a week. No-one has taken to the streets in an American ‘Arab Spring’. The heroes of this revolt are nicely tucked up in bed at night, and applauded by many for saying ‘Freedom is the right of the healthy not to pay for the sick.’ 

They really really hate Obamacare. Ok, I’m in Georgia and the South where Republicans rule, but its only by being here (visiting my Obama-voting family) that I start to understand how Texas Senator Ted Cruz, the defacto Che Guavara of this Tea Party revolution could bring government to a grinding halt.

I still think the Republicans will pay for this in the next election. All the polls show that most people blame them for the shutdown (63% blame Republicans, 57% blame Democrats).

But the forty of so Tea-baggers in Congress will keep their seats, so they have nothing to lose. They owe their political life to gerrymandering State legislators who allowed Republicans in places like Texas to draw safe conservative districts. They’re funded by powerful conservative lobby groups like the Tea party Patriot, Americans for Prosperity, and FreedomWorks - not the Republican party.

It’s not just that they ignore moderate Republicans like House speaker and defacto leader of their party, John Boehner; they have him by the short and curlies. 

Their seats are safe (and well funded). His isn’t.

Their local support is not to be sniffed at. These Tea Party renegades have tapped into a rich vein in the American psyche, the part that yearns for the days when federal government in American kept out of people’s lives and did nothing except run the military and foreign policy. No income tax, no federal laws. The State legislature ruled supreme. 

These guys really don’t believe in America at all.

At first the shutdown looked like a coup without guns, with Ted Cruz as a Baptist preaching Bainimarama in a suit. It’s true, they are revolutionary. With no sense of irony, the early preachers of the Tea Party movement used to quote liberally from Saul Alinsky’s left-wing activist hand book ‘Rules from Radicals’. They are now fulfilling their gorilla warfare dream to literally ‘get government out of the way.’ I’ve never seen Michele Bachmann look so happy. ‘The party is energised...This is what the public want,’ she said a few nights ago on Fox News. 

Some Tea Party leaders even talk about the need for ‘second amendment remedies’. Nearly half of all Republicans think that an armed insurrection may be necessary in a few years. 

Obama cannot negotiate with these Republican lemmings in suicide vests.

But they are not, as some have said, changing the principles of the constitution. They are sticking to the rule of law. They may be setting a political precedent by re-negotiating laws they don’t like at a time when they should be agreeing a budget so America can pay its bills. But they are not setting a legal one. 

They are political vandals, not coup-makers.

I was at a ‘block party’ yesterday, where neighbours close their street, bring a plate and hang out together. If the shutdown continues, and if Republicans won’t support a rise to the debt ceiling, then we may see people like this take to the streets without their plates. 

Government funded pre-school programs have closed. One man has a son working for the Coastguard, and since the shutdown, relying on limited satellite and weather information. He’s worried about his boy.

Atlanta is home to the Centres for Disease Control & Protection (CDC) where the world’s only vial of small pox is stored, next to the test tube of Ebola and other nasties. The shutdown has closed the CDC, which means that no-one is working on curing people of nasty diseases. 

A virologist said that he was meant to be working on a vaccine for next years flu virus. ‘My advice to people is don’t get the flu next winter’.

Small hotels in national parks have had to close and cancel reservations. Americans hate stories of small businesses getting whacked.

But then I chatted to a shop assistance at the mall. Young, fit and black. He hates the idea of Obamacare. ‘Why should I have to pay a fine if I don’t have health insurance? I get check ups. I’m fit. It should be my choice.’ How do you explain to a young guy selling Ralph Lauren suits that he better hope he never ends up in a hospital in America later in life.

At least the late night comedians have had a great week. Americans tune into Jay Leno or the Daily Show (depending on their politics) to work out what they really think about the shutdown. Not many would disagree with comedian Stephen Colbert’s analysis: "Republicans don't want to shut the government down, they want to end this stalemate and get back to the important work of crippling the government."

If there’s one thing Americans in the South are starting to hate more than Obamacare, its a government shutdown.

 

 

Comments (16)

by Simon Nathan on October 08, 2013
Simon Nathan

Well, so much for the sacred US constitution which Americans often self-righteously preach about to those countries they think are not so “democratic” as they are. A minority can hold the country to ransom, and the convoluted separation of powers can’t do anything about it.

What we are looking at is a shonky 200-year old compromise constitution, patched up with amendments, that enshrines the rights of individual states to set their own electoral rules even if they are obviously corrupt. The rest of the world will draw its own conclusions about the fairness and effectiveness of US “democracy”.

by Fentex on October 09, 2013
Fentex

With 120% of them blaming two different parties for the problem the U.S electorate seems a little confused.

by Andrew Geddis on October 09, 2013
Andrew Geddis

@Fentex,

I wondered about that, too. But I assume it is possible to blame both parties for what is happening ... .

by Fentex on October 10, 2013
Fentex

One imagines there's an unmentioned intersection that blames both parties, but unless a reporter makes it explicit they can't then say "most people blame them for the shutdown (63% blame Republicans, 57% blame Democrats)" because how does the reader know if 'most' do blame the Republicans?

If (for example) 40% blame republicans alone, 23% both parties and 34% solely blame Democrats then as I don't think a person blaming both parties can be counted among those blaming a sole party 'most' would not blame the Republicans alone as the report implies.

To accept that 'most' U.S citizens blame the Republicans one must accept that 120% of U.S citizens voiced an opinion.

This was careless, and by that, inaccurate use of statistics.

by Andrew Osborn on October 11, 2013
Andrew Osborn

The media in NZ has been pathetic on this topic. Shallow as a puddle - simply blame the Republicans for this business and completely disregard the fact that the Democrats won't face up to the fact that the US is spending more than it earns.

It's easy copy.

 

 

by Rab McDowell on October 11, 2013
Rab McDowell

Of course it is irresponsible for a small number of republicans to hold the government to ransom by demanding cuts to the budget.

But is it responsible for the president to insist that government expenditure should keep rising when the government debt has risen around $ 6 trillion under his watch? Particularly when Govt expenditure is running at about 160% if income.

Compare that to NZ where we did increase expenditure do ease the impact of the GFC but now looks to be under control and the budget coming back into the black.

by Brendon Mills on October 12, 2013
Brendon Mills

"But is it responsible for the president to insist that government expenditure should keep rising when the government debt has risen around $ 6 trillion under his watch? Particularly when Govt expenditure is running at about 160% if income."

The money for bolting lasers onto destroyers and putting golf courses into the thousands of military bases the US military have around the world have to come from somewhere...

by Andrew Geddis on October 12, 2013
Andrew Geddis

But is it responsible for the president to insist that government expenditure should keep rising when the government debt has risen around $ 6 trillion under his watch? Particularly when Govt expenditure is running at about 160% if income.

That assumes that the only (or, at least the best) way to reduce government debt is to reduce government spending alone. Obama's proposed budget would have cut the deficit - but because it included "tax increases", the Republican's refused to look at it.

Also, if you want to point fingers of blame for "too much" government spending, one of them will have to stretch back to George W. Bush.

by Rab McDowell on October 12, 2013
Rab McDowell

Cutting Govt spending is not the only way to reduce govt debt but it is, all things considered, probably the best way. Show me a country that has taxed its way to prosperity. Despite that, the political climate in America is such that tax increases will be part of the "solution". The difference they will make to the deficit will be miniscule but it will make the so called 99% less envious.

Federal (Government) spending does not create wealth, it takes it from those who are creating wealth and spends it less efficiently elsewhere.  The thing that is doing more than anything else to foster prosperity in the USA right now is not federal spending programmes but dropping energy costs.

Correct me if I am wrong but I understood that Obama's budget will not cut the deficit, it will merely slow the rate of increase. Such is the state of the USA govt finances.

Agree with you about govt spending under George W so it may seem a tad hypocritical for republicans to take such a strong stand now. Problem is, if not now then when, given they way their finaces are going?

The last president to make any impression on the rate of increase in the deficit was Clinton in his later years, but he had a thiving economy and his performance in his first term wasn't so flash.

by stuart munro on October 12, 2013
stuart munro

Rab, you are labouring under many misapprehensions about government spending.

Governments do not by any means inevitably spend less efficiently than markets or private individuals. Well targeted stimulus spending is extremely efficient, much more so than investment in the various bubbles that dominate US markets. Or investment in the Auckland property bubble for that matter.

It's not a matter of "taxing one's way to wealth" - the wars in Afghanistan and Iraq were expensive events, and the way they have been fought, hi-tech with lots of contracting, has not spread military spending as deeply through the US economy as other wars did. Traditionally the US increased taxes to pay war costs. Thus far they have not done so.

Your optimism for the current NZ economy is also anomalous. Having failed to average growth above 2% for five years, the government looks forward to raising interest rates to counter the inflationary effects of this new surge of growth. With latent inflation running at over 3% there is no real growth to constrain. NZ can look forward to more stagnation under Bill English, who will go on to blame the softness of world markets caused by the US government shutdown.

by MJ on October 12, 2013
MJ

In NZ we didn't increase expenditure, but we got really lucky because our major trading partners Australia, China and the US did. If those economies had all behaved as you suggest we'd be in a whole lot of trouble now. There would be no demand anywhere in the world economy.

There is no principled debt management stand by the Republicans, but a naked attempt to derail Obamacare by any means necessary and damn the consequences. Just look at these for examples:

http://www.thedailyshow.com/watch/thu-october-10-2013/medican-t----taker...

http://www.thedailyshow.com/watch/thu-october-10-2013/medican-t

 

 

 

by Rab McDowell on October 12, 2013
Rab McDowell

Governments do not by any means inevitably spend less efficiently than markets or private individuals. Well targeted stimulus spending is extremely efficient

Stuart, if you believe that then I quit this debate. You are not for turning. I just hope you never get the chance to put those beliefs into practice.

Before I go though I would mention a report I read some time ago. Apparently our Inland Revenue Department commissioned research into the efficiency of taxes. They must have been somewhat embarrassed when they found that every dollar spent of the taxes they collected had a net cost to the economy, as I recall, of around $2.54. This cost was not just in paying bureaucrats but in a whole host of factors such as the opportunity cost to the taxpayer of funding more productive investment.

 

by Andrew Geddis on October 13, 2013
Andrew Geddis

@Rab,

I suspect arguments on a comment thread amongst enthusiastic, but only partly informed, amatuers (I include myself here, obviously) won't settle much. But here we go:

Cutting Govt spending is not the only way to reduce govt debt but it is, all things considered, probably the best way. Show me a country that has taxed its way to prosperity.

But that's not the point - whether taxes make a country richer overall. Instead, it's that if you are in a situation where your nation is structurally spending more than it "earns", you have two choices: spend less, or "earn" (meaning, tax) more. I suspect, looking across the world, we could find lots of evidence claiming that one or another approach is the "best" one to deal with structural (as opposed to cyclical) deficits ... but that'll be what the 2014 election is for!

(Actually, there is a third choice - you can spend more AND cut taxes (like Bush did in the 1990s) on the assumption that the economy will continue to expand so quickly that revenues actually increase to cover the extra expenditures. This is ... not wise.)

Federal (Government) spending does not create wealth, it takes it from those who are creating wealth and spends it less efficiently elsewhere.

Sometimes yes, sometimes no. Some of that spending is on things that only a state can provide (defence, policing, prisons, etc). Some of it is on things that, given collective action problems, a state actually can better provide (roads and other infrastructure). Some of it is on things that, while the private market can (and does) also provide it, we want for reasons of equity to make sure are universally available (healthcare, education, ACC coverage, etc, etc). So the "efficiency" of private vs. public spending isn't the only (or necessarily the best) metric to use in the analysis.

Despite that, the political climate in America is such that tax increases will be part of the "solution". The difference they will make to the deficit will be miniscule but it will make the so called 99% less envious.

You'd think. However, given that the Republicans have en masse signed up to Grover Norquist's "no new taxes, ever" pledge and are more scared of being primaried from the right than of being beaten from the left, I'm less certain than you.

Correct me if I am wrong but I understood that Obama's budget will not cut the deficit, it will merely slow the rate of increase. Such is the state of the USA govt finances.

I think you are right. I misspoke earlier.

The last president to make any impression on the rate of increase in the deficit was Clinton in his later years, but he had a thiving economy and his performance in his first term wasn't so flash.

True. But you also have to acknowledge that Clinton increased revenues by raising taxes in that first term (which didn't then prevent the economy from booming in his second). Something that Bush then reversed (along with a lot of Democrats in the House/Senate). Which is the primary reason that Clinton's surpluses have now become huge, huge deficits.

by Andrew Osborn on October 13, 2013
Andrew Osborn

Citing the actions of various presidents and the results isn't really productive. The classic example being Clinton who was gifted with the internet boom and a whole lot of corporate chicanery which allowed corporates to essentially falsify their annual reports and cause a bubble in the stock market. These were one-off events made the accounts look good at the time but the chickens came home to roost for the next guy in the White House. If you're going to be remembered as a sucessful president it's best to chose the timing carefully - because most of it has nothing to do with which president or govt is in charge.

Regarding tax in the US. What they really need is not higher or lower taxes. They desperately need tax simplification. The current tax code is, I beleive, four times longer than the complete works of Shakespeare. For decades special tax loopholes have been created by various friends and allies until today the tax structure is utterly ridiculous. With tax simplification they would greatly reduce the cost of collection and likely be able to reduce tax rates whilst increasing revenue.

But it won't happen: Too many people in DC have the hands of the lobbyists up their backs. In both camps. So the US govt is in a complete logjam - it cannot manage itself.

by Andrew Osborn on October 14, 2013
Andrew Osborn

Rab: Of course it is irresponsible for a small number of republicans to hold the government to ransom by demanding cuts to the budget.

We are not very well informed on this side of the Pacific and maybe Americans aren't either.

Here's a snippet of what we are not being told by the media: The Republicans have repeatedly said they will sign into effect the entire budget with the sole exception of Obamacare. This is a 19,000 page Act , followed by 20,000 pages of regulations to implement it which was foised on Congress a couple of days before it was forced through on party lines - not a single Rep voted for it. Nobody even had chance to even read it, let alone understand it! Owners of small businesses in the USA are reporting crazy stories about it's practical implementation and the negative effects on business and jobs. It's a dog - a dog which likely won't even achieve its original objectives.

From a constitutional point of view the Reps are completely within their rights to push back on this thing. Wars have been fought for less. I suggest an election next year should used as a test of its popularity, mweanwhile pass the budget without it.

by stuart munro on October 14, 2013
stuart munro

Rab seems to have missed the point about the inevitably of poor state spending decisions. It is not that states cannot or do not often spend poorly - but good spending is certainly possible, and a refusal to acknowledge the importance of the difference leads to further bad decisions, like anti-statist positions that destroy healthy and parsimonious services.

I'd be interested to see the IRD research - it sounds like arrant fantasy.

 

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