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Inside the Temple of Doom

“The Tea Party Movement Is a National Embarrassment.” That was Stuart Whatley’s assessment on the Huffington Post. “It is loud, passionate, and generally unconcerned with pesky things like facts or reasoned, practical solutions to the country’s problems.”

Meghan McCain accused the movement of “innate racism.” Bill Maher, never one to mince words, opined, “The Teabaggers, they’re not a movement. They’re a cult…I don’t speak s#!+kicker, but I know that in their world, freedom means guns, diplomacy means weakness, and socialist means black.”

The Tea Party movement began in early 2009, just after the Obama inauguration, and was immediately endorsed by Fox News. Dick Armey’s group FreedomWorks organized several events. Neil Cavuto, host of Fox News show Your World, explained, “We are going to be in the middle of these protests because at Fox, we do not pick and choose…We were there for the Million Man March even though, as I pointed out, it turned out to be well shy of a million men.” That may be true. It is unarguably true that the Million Man March occurred a year before Fox News went on the air.

Was the Tea Party movement a grassroots effort from day one, or was it “Astroturfed?” In a way, it doesn’t matter: As is true in most places, Washington rallies and groups are under local control. The Olympia Tea Party, for example, is under the leadership of Ken Morse, a Lacey Republican who earns his daily bread in the septic tank business. To hear MSNBC tell it, Ken Morse must be an idiot, a fanatic, perhaps even a racist. His website (OlympiaTeaParty.com) carries pictures of him in the tricorn hat he wears everywhere. Yikes.

There’s only one problem with that: I have met the enemy, and he is us.

What exactly does the Tea Party believe? Where’s the beef? Both Morse’s site and TeaPartyPatriots.org preach the Holy Trinity: “Fiscal Responsibility, Limited Government, Free Market.” That alone would earn them the derision of the left, which dismisses these objectives as economic ignorance, antigovernment paranoia, and kowtowing to porcine big business. Tea Partiers, many of whom were displeased by Obama’s election, saw both the stimulus package and bailouts of the banking and auto industries as unnecessary interventions if not outright robbery from the American taxpayer. At the risk of overgeneralizing, they view President Obama, Senator Reid, and Congresswoman Pelosi as willfully ignorant of harsh fiscal realities. By raising taxes to pay for unnecessary social programs, the Tea Partiers say, Democrats push the country closer to socialism (an ideology assumed to be inherently evil), and taxes were too high already.

Those are bold accusations, and if true, they demand our immediate, nonpartisan attention. I’ll admit my bias up front: As you’d expect from a writer for an alternative newspaper, I lean liberal. I never vote straight ticket, but I’m a registered Democrat, and I voted proudly for Barack Obama. At least three afternoons a week, I flip back and forth between MSNBC, CNN, and Fox News, just to see how amazingly different the news can feel as it’s related on each network. Like any good lefty—indeed, any good citizen—I’m appalled by protest signs that feature Obama in a Hitler mustache or witch doctor garb, so I tune out whatever those fanatics have to say. But I also know the media prefer to point cameras at outliers; nut cases make better, more reassuring copy than in-depth analyses of reasonable dissent. If reporters were to visit a Star Trek convention, for example, they’d interview ten hapless dweebs in Andorian makeup before one soccer mom humoring her kids. Racist Tea Partiers wielding moronic “Teabag Obama” signs are a magnet for eyeballs, the fuel of TV and online newspapers. I wanted to know if the Tea Party actually has a point, so I resolved to focus instead on the movement’s most reasonable arguments.

I met with Ken Morse at a Lacey coffee shop. I was fifteen minutes late for that appointment, but he couldn’t have been friendlier or, to put it bluntly, saner. He’s not a Birther. He’s not a racist; prominent area Tea Party activists include Carl Pike, a Native American, and Reverend Wayne Perryman, who is African-American. His contacts include Sharon Hanek of the Washington Federation of Republican Women. He’s not especially religious; he believes in at least some form of evolution. He’s sincere but not overzealous, friendly without being pushy, a guy who says things like, “We want to build a bridge to our Representative, not yell at him. It seems to me that our goal is to persuade, not punish.” He feels the Tea Party represents the rejection of Bush-era GOP policies rather than liberal ideals, of which conservatives already disapproved. We talked for over three hours, and he’s a mensch, and I suggest you invite him to your next backyard barbecue.

He is also, and I’m probably required by my party to say this, the Harbinger of Doom.

The doom Ken Morse fears is the day creditors come calling. Ten years ago our national debt, the amount Uncle Sam borrowed but hasn’t repaid, was a “mere” $5.6 trillion, 57 percent of the gross domestic product. Now it’s $12.9 trillion, a staggering 94 percent of GDP. Perhaps the most sobering way of illustrating that debt is to say each American owes almost $42,000 of it. Our deficit, the difference between what the government takes in and what it spends, tripled from 2008 to 2009, soaring to $1.42 trillion.

Morse admits this runaway spending began under Republican President George W. Bush; but from his perspective, the Obama administration added insult to injury by blowing gazillions on corporate bailouts (aka TARP, the Trouble Asset Relief Program), plus the stimulus package. That program will cost close to $800 billion by 2011, and some conservatives fear it’ll be extended to the tune of trillions of dollars. And even if China and other lender nations never show up palms-out on our doorsteps, deficits often drive up interest rates, squelching private investment. He supports draconian, across-the-board cuts, and he admits that might mean trimming the defense budget, usually a conservative taboo.

The federal budget is divided into two categories, mandatory and discretionary spending, with some programs fuzzily lapping from one into the other. Almost two-thirds of the budget is mandatory, meaning it has to be paid to satisfy legislation (i.e., laws) written previous to the current budgetary year. That stack of bills includes Social Security, Medicare, Medicaid, food stamps, and some veterans’ benefits. A blanket term for programs paid for by mandatory spending is “entitlements,” a loaded word employed by right-wing ideologues as code for “poor people begging for rich people’s money.” The truth is, mandatory spending recipients are, in fact, entitled to that money; it would be illegal to do anything else without first changing the law. About a seventh of mandatory spending pays the interest owed on previous loans.

Defense spending, however, is discretionary. In 2008, defense spending ate $481.4 billion dollars, over half the discretionary budget. It costs money to fight two wars. Whether those wars will ultimately cost more than TARP depends on whom you ask, but it also bears asking what we got for our money. Stimulus spending creates infrastructure here, war mostly dismantles infrastructure there. As Representative Barney Frank said to ABC News, “I don’t understand why, from some of my conservative friends, building a road, building a school, helping somebody get health care, that’s wasteful spending—but that war in Iraq...is going to cost us over a trillion dollars before we’re through.” Economist Joseph Stiglitz told the Christian Science Monitor the Iraq War was “the first U.S. war financed entirely on credit,” about 40 percent borrowed from China and other foreign powers. In order to seriously reduce discretionary spending, we will have to reduce military spending. It can’t all come from programs the right distrusts, because there isn’t enough money there to balance the checkbook.

Common sense tells us it’s irresponsible to spend more than we make. Fortunately, common sense is often wrong, and it turns out a number of countries thrive in deficit. (Japan and Italy may not be thriving, but their deficits are a higher percentage of GDP than ours.) “Neither a borrower nor a lender be,” Polonius advised, but he was a total blowhard. Debt matters, just not as much as the quality of life it affords. We invest in college loans, for example, because we gamble on the higher salaries a postsecondary education will return. “It’s about the risks that a nation is willing to take,” Morse acknowledges. “The Tea Party is saying the risk isn’t worth it.” Economist, historian, and Time contributor Zachary Karabell counters, “[Federal] interest payments in 2010…are not much different in inflation-adjusted terms from what servicing cost 20 years ago, especially relative to GDP.” He believes our investment is secure.

Of course, Morse and the Tea Party movement are worried about more than the national debt. Morse is opposed to both cap-and-trade antipollution agreements and tax-financed health care reforms on ideological grounds. To a free trade fan, economic success depends on companies rising or falling on their own merits. Morse extols “principles instead of politics…I trust the principles of a free trade market.” He supports corporate regulation only to the extent that it prevents either harm to life and limb or monopolies—and “government is the ultimate monopoly.” He believes the stimulus represents a bonanza for companies that don’t deserve it. “America,” he sighs, “is in a crisis of corruption.” Watching propped-up financial institutions reward sleazy, inept executives with staggering bonuses, it’s hard not to agree with him, independent of political orientation.

So is Morse right? Is the Tea Party onto something, or just on something? The IRS confirms that for 95 percent of Americans, taxes went down in 2010, to the tune of about $70 a month per median family. It’s also worth noting that dissatisfaction with income taxes has no direct correlation with the bill. As Howard Zinn pointed out in A People’s History of the United States, “shortly after World War II, when taxes on the very rich were up to 90 percent, a Gallup poll showed that 85 percent of the public thought the federal tax code was ‘fair.’” By 1985, however, four-fifths of poll respondents thought the code was unjust, despite the highest rate dropping to fifty percent. That rate is now 35 percent, as it has been since 2003.

Tea Partiers insist our tax structure is unfair, history be damned, in that even 35 percent is too high a rate. Alan Ward, a business professor at Olympic College, asks: “Seeing that 47% of workers don’t pay anything in income taxes, why should the rest be taxed more, just because they have been successful?” This echoes the opinion of Thomas E. Woods, Jr., who claims the super-rich “actually do the creative work....Naturally, if you’re a janitor,...you’re going to earn multiples and multiples less than somebody in charge of a company that is producing farm equipment that makes eating possible for a hundred million people.” In other words, CEOs earn more because they’re smarter, more creative, more useful people. (One wonders if this applies to Lloyd Blankfein, the CEO of Goldman Sachs, who earns north of $50 million a year.) Historically, the poor have been stubbornly difficult to persuade they’re less deserving of wealth than the wealthy, perhaps because they’ve noticed they live in an increasingly polarized society. When CEOs are paid over 300 times more than the average American worker, it seems fair to ask, not how much tax each class pays on April 15, but how much wealth each has a day later. A generation ago, the pay gap was about 30:1. It seems unlikely any CEO would trade places with our coddled, untaxed poor.

We need look back a mere decade to see deficits can be repaired. President Clinton inherited a $290 billion deficit; but thanks in large part to a flourishing global market and technology boom, that all but evaporated. The Obama administration claims similar progress on its own Bush deficit: it projects a decline to $1.17 trillion in 2011, then $533 billion in 2013 (still much higher than the deficit in 1992). So we’re fine, right? Not exactly. Morse believes those projections depend on a number of shaky variables. States, for example, could go bankrupt, requiring massive federal assistance. California is in such dire straits that Tom Tarabicos of Wells Fargo told Reuters, “You look at it and wonder how the heck they can remain investment grade.” The good news is, states can’t really go bankrupt, thanks to the “sovereign immunity” promised by the 11th Amendment; they can only go into receivership—and it’s never happened once in American history.

Karabell insists Morse’s fears are overblown. “Like home mortgages, much of the debt never has to be paid down. Half of the debt of trillions of dollars is owed by the government to itself, and a quarter more is owed to the American public.” That’s because the government buys treasury bills from itself, then uses them to insure banks and stock the Social Security trust fund. “[T]he debt the government owes itself can simply be rolled over endlessly.” He does think we should be more careful in how we spend that debt, and here’s why: Despite our analogy of student loans, the federal government is, in fact, hemorrhaging money it’ll never get back.

Much of our future hypothetical money has been spent on Medicaid, Head Start, Meals on Wheels, teacher salaries, National Guard facilities, road construction—in other words, infrastructure and other “consumption” programs, as opposed to real investments with monetary returns. There are some surprising exceptions: TARP, for example, which cost only 58 percent of what we spent to bail out savings and loan banks in the ‘Nineties. TARP handed out $245 billion, but $169 billion, close to 70 percent, is already back in the till. Wells Fargo, JPMorgan, Citigroup, and other recipients paid their loans back early, plus interest. (General Motors, which claimed in a recent ad to have paid back its own bailout, actually repaid one TARP loan with another TARP loan.)

Exactly how much national debt should we be allowed? The truth is, no one knows. To Simon Johnson and James Kwak of NPR, one indicator is the willingness of other countries and private individuals to invest in America: “Interest rates on U.S. Treasury bonds are at historic lows, because people looking for a safe place to put their money are falling all over themselves trying to lend to the U.S. government.” The interest paid on those bonds is, in fact, part of the projected debt we’ve run up.

A recent CBS poll shows only 12 percent of respondents knew taxes went down this year, and only two percent of Tea Party supporters were aware of the decrease. Forty-four percent of Tea Partiers thought taxes went up in 2010. Some of their most frightful concerns are demonstrably overblown. But it doesn’t take an economic genius—or a fiscal conservative—to admit we’re on shaky ground. Rather than shoot the messenger, it might be time to take citizens like Ken Morse seriously; because if the dice don’t end up rolling our way, some of those Tea Party doomsayers will turn out to be prophets. As economist David Wyss told Time, “The best advice that was ever given to a politician was what Joseph told the Pharaoh—you store up the grain in the good years, and you use it in the bad years. But they’re taking only half that advice this time.”

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