Tea Partiers vs. High Rollers

Since the founding of the United States, there's always been an isolationist tendency.   Europe and Asia are far away lands, so it's really difficult to think of the US as intimately tied to countries continents away.  In today's politics, the Tea Party, to my mind, is of isolationist persuasion.

I am sympathetic to its message that the United States should be concerned with the ways it spends its monies.  It ought not spend beyond its means of what it can afford.  But here is the rub.  Citizens think of the US economy in ways similar to their own financial situation.  In a way, that can be a good thing: the bank where they put their money will tell them when they're overdrawn, the stores where they shop will tell them when they have exceeded their credit limit.  The financial institution where they want to take out a loan for a house, boat, etc. will tell them how much they can borrow.
The point is it's not the family that decides what their financial limitations are--it's those with whom they seek additional financial resources, even if those be their own monies entrusted to some bank that provides them with a monthly statement of cash flow.

Now, it is the Tea Party who's proclaimed what the US' credit limits should be.  Encouraged by sundry economists, to whom they turn for reassurance, and armed with their tried-and-true common sense (drawn from their limited financial experience),  these would-be-do-gooders have judged that the US is spending too much, as if they really knew what the limits of credit are for the United States Government of America.  I submit to these Tea Partiers who think the US has borrowed too much that they turn their attention to what our creditors think are its limits and to note what they believe when such limits have been exceeded, viz., when the US bonds are no longer in demand for purchase on the open market.

Contrast their knowledge of economics with that of the high rollers.  These are the CEOs of giant corporations that deal on the international transactions on the open markets.  They engage in investment speculation based on their empirical forecasts of the economic value of the good faith and credit of US on stock exchanges worldwide.  They are betting that the worth of US assets is far greater than its debts.  Accordingly, they, including banks around the globe, buy US treasury bonds for their portfolios; and more importantly, they exhibit confidence in the US ability to repay what it has borrowed.  Now, if that confidence were found to be ill-founded, the markets where our bonds are exchanged would act much differently than they are:  it's up to the markets to decide what are the limits to US credit; it's not for the Tea Party (despite their experiential knowledge base and the opinions of economists who advise them) to decide.

What the Tea-Party people don't take into account is what the US actually does on the international scene.  It's as if the US government should  aim to do solely what pleases the Tea Partiers!  It should conform the US international and national transactions to their budgetary narrow interests and knowledge-base.  So, no Obamacare--it's too expensive to save many more US citizen lives through a national health care program.  So, bring the US military home; get rid of the nearly 1000 US military installations around the world and keep bases on home territory!  That's the opinions, I would aver, the Tea Partiers would hold, if anybody were foolish enough to want to know what such opinions are, given the foundations.  Well, the plain fact is that because of the US military presence around the world, we, globally, have entered an era where there is more peace and prosperity than heretofore witnessed on the planet.  And, the President accepted the Nobel Peace Prize, as he said, on behalf of the US military for their much needed and appreciated endeavors around the world!  That acknowledgement of US value in the world is translated, I believe, into economic confidence around the world that the US will pay off what it owes others, and specifically, will not default this month or at any future date.

So, what's this about the debt ceiling being debated in Congress?  (a question posed in the style of John Stossel)

It seems that Congress would influence the interest rates on US Treasury bonds and notes by attempting to set its own "debt ceiling" and by, furthermore, instituting austerity measures as a coherent plan, such as the sequester, to give the impression to High Rollers that the US is reining in on US spending.

Nice try but no cigar!  My bet is on the High Rollers, who through the marketplace exchanges will continue to determine the US credit limits for national and international transactions. Too bad, Tea Partiers; and too bad, US administration and Congress.