It has become popular to speculate what a McCain presidency would be like. After all, if McCain were president, Republicans would have continued to apply their basic economic theories, as it would be in their best interest to do so.
But instead of imagining a McCain presidency, I think it would be even more interesting to imagine how the Tea Party would have managed the economic collapse if the movement had taken control in 2009.
It's difficult to imagine the Tea Party rising to power in 2009, because the Tea Party owes its existence to the intensity of opposition to a black president. Without the threat of a centrist president, would rich sociopaths like the Kochs bankroll a grassroots movement of pitchfork wielding idiots? Probably not. Nevertheless, it's an interesting exercise in science fiction, so I will do my best.
The first step by the Tea Party would have been in an area where new administrations have broad discretion: TARP. With the economy spiraling downward out of control and banks unable to lend, the Tea Party would have reacted by rescinding the 2008 bailouts and demanding immediate repayment from financial institutions. Those unable to pay would have been allowed to fail. This would have destroyed the world financial system.
They would have also immediately disavowed Bush's 2008 automobile bailout, selling off assets of GM so that the private market could determine its fate. The United States automobile industry, including Ford, Chrysler, and GM, would have immediately collapsed along with the supply chains that depend on the auto industry. All told, several million jobs would have been directly eliminated over the period of a year. In an economy losing 700,000 jobs a month, this would have been devastating.
In the wake of the economic collapse, Tea Party members were (stupidly) upset by the suddenly large deficit. Their limited knowledge of economics renders them incapable of understanding how recessions create an automatic increase in emergency stabilizers and a decrease in tax revenue. A Tea Party president would have reacted to large deficits with slavishly stupid shock and dismay. He or she would have slashed spending on social programs, in an ill-fated attempt to balance the budget. Several million federal, state, and local employees would have lost their jobs, but beyond that, those who count on a social safety net during a massive recession would have been out of luck. Many would have starved to death. Others would have turned to violence and crime. Many others would have moved to more prosperous countries -- in Central America.
Businesses would have benefited from the Tea Party's new regulation-free economy, but without any consumer demand or commercial credit, they would have been unable to take advantage. They would have also benefited from a dramatic decrease in high skilled labor costs, thanks to massive unemployment.
A Tea Party president would have also attempted to move to the gold standard or "sound money." Even the slight possibility of this coming to pass would have sent foreign investors running screaming from the t-bill. Our currency would have become worthless, as investors would have fled our cartoonish economic decision-making process.
Taxes would have been slashed across the board, but with so few people actually employed and paying taxes, the benefits would all go to the rich. Regressive state and local taxes would have shot up, as many states would have tried ineptly to fill the void left by the federal government's sudden indifference to social problems.
As for foreign policy: It's tough to tell what would have happened in that arena. Tea Partiers' foreign policy views involve a combination of paranoia, suspicion of foreigners, isolationism, extreme susceptibility to rumor and innuendo, and jingoism. Each foreign policy crisis would have been treated with either mindless meathead belligerence or complete apathy. We would surely remain in Iraq for perpetuity, but it's unclear how their lizard brains would react to the events during the Arab Spring.
Environmental and food regulations would have been completely gutted, and federal agencies like the EPA would have been shuttered. It wouldn't have taken long before tens of thousands of citizens were poisoned by food or dirty water.
If you find these predictions ridiculous, I don't blame you. No actual president would ever undertake these actions. Even if they ran on the Tea Party platform of ending the Fed, cancelling the bailouts, removing most regulations, slashing taxes on the rich, gutting the social safety net, and shutting down the EPA/FDA, they would never be able to carry out these policy goals. Someone (like the Chamber of Commerce) would step in and stop them.
It's amusing that -- unlike much of the more realistic Republican Party platform -- the Tea Party platform is so genuinely insane and unrealistic that it is nearly impossible to even fathom how disastrous it would be. Undertaking even one of the above steps would probably destroy the United States. Pursuing all of them at once would turn us into some sort of dystopian Randian hellhole.