3. All That Silliness Cost Tax-Payers Almost $2 Billion... So Far
A New York Times poll of Tea Party supporters found what should be obvious to all: they are more “intense in their desires for a smaller federal government and deficit” than the rest of the population. They hate wasteful spending, and one would be hard-pressed to come up with a sillier use of tax dollars than on a depressing partisan food-fight over the debt limit, a limit that was going to be raised eventually no matter what. And that's just what happened, according to CNN:
The debt ceiling debacle has just cost U.S. taxpayers more than $1.7 billion.
That's the amount of additional interest the government had to pay investors Monday to sell Treasury bills that finance its operations.
To be precise, the extra cost is $1,721,250,000 more in interest payments than the government would have needed to pay investors just two weeks ago, when they were willing to accept far lower rates before the debt ceiling became a crisis.
"That's real money," said IHS Chief Economist Nariman Behravesh. "Taxpayers need to wake up to the fact that these kind of shenanigans in the end cost."
4. It's Going to Make the Government's Fiscal Picture Worse
That $1.7 billion just covered the bonds sold on Monday. There's more to come. And when the economy slumps, it will further depress tax receipts – which are already at a 60-year low as a share of our economy – even as people need more government services to get by.
Higher interest payments on the public debt, lower tax revenues and more demand for government services – the great irony of this debt ceiling game has always been that playing it too hard would cause deficits to rise, not fall, over the medium- to long-term. As economist Paul Krugman put it, “those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.”
America lost big-time in this deal, progressives lost as well. But the Tea Partiers – the rank-and-file – were by no means winners. And while they probably don't grasp exactly why, they know they lost something in the fight. While a slim majority of liberals approve of the debt deal, a CNN/ORC poll found that Americans who identify as Tea Partiers opposed the deal by a massive 68-27 margin.