Because of low voter turnout in 2010, tea party candidates were elected to Congress. Their positions are now secured by gerrymandering, a perversion of democracy whereby politicians now pick the voters instead the voters picking the politicians.
The mainstream GOP has come to regret the albatross that is now around its neck.
Confusing microeconomics (the way individuals and businesses operate) with macroeconomics (the aggregate national economy), tea party congressmen/women demonstrate ignorance in telling their constituents that the debt is going to drive the U.S. to bankruptcy.
Bankruptcy or insolvency is not an issue. The U.S. Treasury sells interest-paying investment “securities” to banks and countries, and this is what is called “borrowing.” The total value of securities sold and interest owed is what is called “the national debt.”
In the case of countries like China, in order to get back what we owe them, China must buy something from us in goods or real estate from someone who wants dollars. If they don’t buy from us, they don’t get paid. The U.S. Treasury does not pay them in dollars, Chinese currency or gold. It is trading of goods-for-goods in dollar value. (Mosler, “The 7 Deadly Innocent Frauds of Economic Policy”).
Another “fraud” is that our grandchildren will be saddled with debt. Our wealth is in the goods and services we produce in a year, plus all imports minus all exports.
Therefore, it is not possible to send goods and services (our wealth) back to pay a debt incurred in the past, any more than it is possible to save goods and services for our children in the future.
What we should do for our children is improve their education to include an understanding of how our economic system works, so that they can vote intelligently. Their education must also equip them with the skills and technologies to produce everything that they’ll need in their lives.
Mosler compares the economy to a big department store containing all the goods and services produced in a year. An ideal economy has full employment with both people and the government purchasing from the store; ideally, the store is empty at the end of the year, with everybody getting what they needed.
With even a minimal understanding of macroeconomics, congressmen/ women would learn how to use government-spending, interest rates and taxes to achieve full employment — the key to a booming economy. Austerity kills jobs.