The House vote to avert a government shutdown till September was a pleasant surprise from a Republican party deeply opposed to government spending, but forgive me for being cynical. Not only do I not believe that this signals a change of heart for the GOP, but I believe that it is little more than time-bomb politics meant to appease Americans tired of hearing about budget cuts and then simply explode later.
In my blog "Bankrupt Politics: The Republican Plan to Kill our Economy," I talked about the Republican strategy of destroying our economy to hurt Obama. That strategy reached an absurd low recently with the sequester. By refusing to consider closing tax loopholes for wealthy Americans and big business, the GOP has made it impossible for the White House to reach a reasonable compromise with them. Spending cuts alone will not solve our deficit problem and the Republicans know it, yet they are betting that by holding the line, they can derail our economy and destroy the credibility of the president in the process. If the Democrats are seen as being unable to protect our economy, voters will lose faith in them and pave the way for Republican victories in the 2014 and 2016 elections.
But that is not what will happen and the time-bomb that the Republicans have set for the Democrats will blow up in their own faces too.
Steep budget cuts will certainly slow down our economic progress. The latest jobs report may be encouraging and unemployment may be down but that does not take into account the harshest effects of budget cuts, which could suck 1.5 percent out of our GDP and lead to eventual job losses. Other than the direct impact from the slashing of government programs and federal layoffs/furloughs, there will also be indirect effects on the private sector such as loss of business resulting from disruptions to public transport and air travel (which is already happening), market uncertainty and tightening of credit leading to a slowdown in our capital markets, loss in consumer confidence, pressure on small businesses to meet payroll in the face of falling demand, and scores of other adverse events.
These events will reflect very poorly on the Democrats since they are in charge. However, that does not mean that Republicans will escape unscathed; polls routinely show that people blame both parties for the gridlock in Washington, and if things do go south, everyone's head will roll.
This will create a dangerous vacuum that will be filled not by new Democrats or Republicans but by Tea Party fanatics who will hijack Washington and dismantle pretty much everything that makes us a civilized nation. What the Republicans will get instead of a conservative victory will be candidates who are intent on sending America back to the Stone Age, and even though they may carry the flag of the GOP, the Tea Party is so far removed from sanity that even the most ardent conservatives will shudder.
A Tea Party nation is not a happy place. The philosophy behind the movement pretends to be conservative but is so extreme that it is really more a doctrine of anarchy instead. Republicans are in favor of small government but Tea Partiers want no government, and that is a big difference. Traditional conservatives value freedom but not madness, but that is what the Tea Party promises if they gain more prominence in politics.
The problem is that the Republicans are seduced by the similarities between their two platforms. If the Tea Party was in power, the United States of America would basically be run by those with the most money and with absolutely no restrictions on their excesses, consumer protection would become a thing of the past, unions would be disbanded and workers rights abolished, Social Security and Medicare would be terminated, citizens would enjoy no rights except to exist and carry guns, Christian values would be imposed across the nation, and our borders sealed off to any form of immigration.
If I was a Republican, perhaps some or all of these things would appeal to me too, but here is the other side of the coin: under a Tea Party regime, America's markets would collapse without any rules to protect investors, the biggest companies would form oligarchies but quickly become lazy and inefficient because of absolute power, workers would lose their motivation to be productive due to declining wages and exploitation, foreign trade would falter because of U.S. isolationism and jingoism, public infrastructure would crumble for want of funding and paralyze commerce, disaster relief and emergency services would only be available to those who can pay for them -- leading to lawlessness and chaos, riots would become commonplace, international threats would multiply in the absence of real foreign policy (hurling threats at Russia from Alaska just not being enough), and last, but not least, the seat of American government would be moved from Capitol Hill to some caves in the Rockies to save public money.
Yes, there will be no taxes at all, but neither will there be a recognizable Union left to pay any taxes for. After all, civilization might cost money but anarchy is free.
This is what the Republicans will get instead of Obama if they stay on their current track, and unless this is what they actually want, then they are going to be extremely sorry they ever made a deal with the devil. Republicans may hate the president, ideologically and personally, but their obstructionism now will empower the very people whom they are sure to hate even more.
It is true that the Tea Party has money, a huge grassroots following, and no qualms about making a big nuisance of themselves in political races, but the Republicans really need to recognize that once the Tea Party gets rid of the Democrats, it will turn its sights on the GOP itself -- and obliterate it. Like a pâté-maker that fattens up a duck only to ravage its liver later, the Tea Party may energize the Republicans in the short term but will eventually destroy them.
Republicans say they hate progressive values. Well, let's see how they like Stone Age ones instead.
SANJAY SANGHOEE has worked at leading investment banks Lazard Freres and Dresdner Kleinwort Wasserstein as well as at a multi-billion dollar hedge fund. He has an MBA from Columbia Business School and is the author of the financial thriller "Merger" which Chicago Tribune called "Timely, Gripping, and Original". Please visit www.sanghoee.com to sign up for updates.