Koch Economics and their Debt Default Advantage

Mike & Friends Blog

Robert Greenwald

Robert Greenwald is a producer, director, political activist, and Brave New Films founder and president.

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July 29th, 2011 6:30 PM

Koch Economics and their Debt Default Advantage

We are seeing the result of Koch Economics and what happens when a few tycoons accrue the billions necessary to invest in politicians, nonprofit foundations and ideological think thanks.

Pay for active duty soldiers and veterans' benefits would freeze without raising the debt ceiling. Embassies, emergency assistance, IRS and all the accounting at the Treasury Department, airport security, education, student loans and unemployment insurance, food inspection, transportation work and government contracts with thousands of businesses will all be left in the lurch if the government defaults. There's even a chance Social Security checks will be delayed or withheld altogether.

Through their political contributions, the Koch brothers are on the front lines of this debt debacle, and they are in position to use the economic crisis to advance their ideological and economic goals of eradicating social services.

We've been following this on our Koch Brothers Exposed page on Facebook. What we know for sure is the Koch brothers fund individuals who are willing to play chicken with our nation.

We know for sure the Koch brothers are funding groups willing to gather kindling with one hand and stop short of striking a match with the other. Charles Koch must smile ear to ear watching a Democratic White House and Senate haggle over trillions of dollars of cuts. David Koch's steak must taste extra juicer knowing one-half of one branch of government is rewriting the social contract for the non-billionaires among us.

Americans for Prosperity, which was founded by the brothers and a recipient of $5 million of their dollars, has been leading the charge to oppose any measure currently facing a vote in Congress. With allies like Sen. Jim DeMint, Americans for Prosperity is pushing a bill so extreme it would require Congress vote and approve a constitutional amendment before the more urgent issue of government default.

All the tit for tat nature of the debt ceiling vote, an action so routine Ronald Reagan raised it 18 times and the last administration seven times, has forced some economic experts to question if the U.S. is a good investment anymore. This too is advantageous for the Koch brothers' ideological agenda. If it hurts the economy it helps whomever the Kochs support in the upcoming election, who in turn will favor politics that boost the Koch brothers' profits.

But it also hurts working families and policymakers. Folks who borrow money would see their interest rates rise on their car payments, mortgages, you name it. That's also true for future Congresses. They too would bare higher costs to borrow money and pay current and future obligations.

This, however, is not the subject of study at the Reason Foundation or Mercatus Center, two think tanks funded and allied with the Koch brothers. The centers are out with slick pie graphs and policy FAQs that cast doubt on the Treasury Department's credibility. These position papers come right up to the white line of corruption allegations and cooking-the-books sentiment. Without saying so explicitly, the Koch supported think tanks argue the Treasury Department is wrong about its ability to pay its bills.

This tactic is reprehensible. Rather than investigate solutions or this crisis's origins, the Koch brothers' web of influence is keen on undermining the "full faith and credit" of the U.S. Treasury and openly inviting catastrophe.

Josh Marshall wisely observed our debt is the manifestation of Hamilton's dream, chiefly: "The national debt -- created through the federal assumption of state war debts -- was created to... get the holders of bonds, necessarily wealthy and powerful people, to have a vested interest in the fixity and stability of the federal government."

The Koch brothers' hidden influence in this debt fracas is more Hamiltonian nightmare: the wealthy and powerful people took their vested interest and own the whole store. The Koch brothers could end this bickering with a few phone calls, much like what the Chamber of Commerce is doing. Instead, the brothers are content to foment discord, disillusionment and potentially default, much to the detriment of all of us.

I hope you'll take part in this conversation and more by clicking the like button at our Koch Brothers Exposed page on Facebook.