The Punch
By Will Turner
It is now beyond doubt that the 2012 US presidential election will be all about the US economy and which candidate can convince the majority of voters that he or she can do the best job of managing it. If you find this a depressing scenario you are not alone.
Virtually all international media coverage of America’s recent debt ceiling crisis carried with it a sense of disbelief as to how the United States could come so close to defaulting on its debt obligations when its capacity to pay them simply required a rubber stamp.
However the incredulity of so many of the world’s political commentators reveals more about their lack of basic knowledge of American history, and in particular how powerful the folklore of the “Founding Fathers” is to many citizens of the United States.
The Taxed Enough Already, or Tea Party, movement has powerfully tapped into some of these deep-seated historical sentiments. If one had to summarise the spirit of the Founding Fathers it would be the refrain “DON’T TREAD ON ME” accompanied by the picture of a rattle snake readying to strike. Britain lost its North American colonies because it underestimated how seriously its subjects across the Atlantic were about the relationship between tax and an individual’s freedom.
Ever since Bostonians unloaded British shipments of tea into their harbour in 1773, attitudes toward taxation and its close relative – government debt – has been at the very core of what it means to be American.
Some years after penning the Declaration of Independence, Thomas Jefferson eloquently explained his perspective on these matters to his friend Sam Kerchival in 1816.
"I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. And to preserve their independence, we must not let our rulers load us with perpetual debt".
He went on to say if America runs into such debt as he saw taking place in England, then “our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses; and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes.”
Make no mistake, many Americans are irate that their federal government now has an astronomical pile of debt ($14.3 trillion and counting) and fear for their own livelihoods along with their country’s.
In light of what people like Jefferson had to say on economic matters you begin to see how the Tea Party has come to have such traction today in the United States. Their growing power is the big news story of 2011 as evidenced by their role in the debt ceiling crisis.
It will be even more apparent as we edge closer to the 2012 presidential election with Barack Obama being particularly vulnerable. So many Americans are out of work and the Republican establishment is aware that its candidate must have the blessing of the Tea Party movement if they are going to take back the White House.
With such success in America one may well ask why the launch of Tea Party Australia twelve months ago went nowhere with the Australian public. Many an American franchise has learned by painful experience that we are not as much like our star-spangled friends as is commonly assumed. This goes beyond us preferring the front seat of taxis and advertisement-free halves of football.
The key reason for the still-birth of Tea Party Australia and similar far right-wing groups is that we have vastly different attitudes towards taxation and government spending. This difference with America owes much to our contrasting histories and the fact we did not have a long and bloody war with Britain over taxes and democratic representation.
Consequently Australians accept (for instance) our much higher levels of personal income tax as being appropriate, but we also make our federal government more accountable for how they use this money.
Evidence enough is Prime Minister Gillard and Treasurer Wayne Swan barely stringing two sentences together on economic policy before they repeat “the budget will return to surplus in 2012-13”. Contrast this with America’s last three fiscal years where their deficit has exceeded $1 trillion per annum.
An additional point to be made is that Tony Abbott has in a lot of ways played to the sentiments of people who might otherwise have flocked to Tea Party Australia. Just as the Tea Party in America arose out of widespread discontent amongst conservative voters with the Republican Party establishment, so might the Tea Party Australia have risen to prominence were it not for an establishment conservative like Tony Abbott leading the coalition.
We can note with more than a hint of irony that 200 years ago Thomas Jefferson was warning America not to fall into the debt traps that so plagued Britain and continental Europe at that time. In 2011 the debt has well and truly hit the fan in both America and Western Europe.
Australia by contrast finds itself relatively debt-free and with coal, gas and iron the developing world cannot get enough of.
To say America’s debt problems are not a big deal next to the likes of Greece is rather like judging a person’s sobriety by comparing them with the town drunk. And just like a drunk being forced to go cold turkey, the West is finding debt rehab is a stinging and abrupt shock.
The era of easy government credit is over, and this reality is transforming the very nature of once prosperous Western societies in ways that we are yet to fully comprehend.
It was Jefferson who also said that “the principle of spending money to be paid for by posterity under the name of [government expenditure] is but swindling futurity on a large scale”.
He would hate to say I told you so.