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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.

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Inside the Koch Brothers’ Expensive Echo Chamber

Documents and interviews unearthed in recent months by Brave New Foundation researchers illustrate a $28.4 million Koch business that has manufactured 297 commentaries, 200 reports, 56 studies and six books distorting Social Security’s effectiveness and purpose.

Together, the publications reveal a vast cottage industry comprised of Koch brothers’ spokespeople, front groups, think tanks, academics and elected officials, which have built a self-sustaining echo chamber to transform fringe ideas into popular mainstream public policy arguments.

The Koch brothers’ echo chamber has successfully written the messaging for the AARP, a traditional defender of Social Security for all generations, which recently opened the door to cutting benefits.

The Koch echo chamber begins with think tanks like the Cato Institute, Heritage Foundation and Mercatus Center at George Mason University and the Reason Foundation, which owe their founding and achievements to Koch backing. These think tanks take their $28.4 million in Koch funding and produce hundreds of position papers distorting the long-term health of Social Security.

The authors of these hundreds of self-described policy studies, newsletters, commentaries and books are then paraded through television, print and online news media. Their distorted message is amplified through shows like Hannity, with its 3.3 million viewers per episode, or CNBC’s Kudlow Report and its roughly 300,000 viewers per episode night after night after night.

Eventually, elected officials react to the Koch echo chamber and typically shift their position for reelection or the next campaign.

The investigation revealed Koch-supported policy fixes, and specific language repeated across each document, such as raising the retirement age or eliminating cost of living adjustments for Social Security dependents and beneficiaries.

These Koch ideas percolate through the echo chamber and into the mainstream. The frequency and repetition of the arguments supplant more popular policy recommendations like scrapping the Social Security tax cap, which would free individuals earning more than $106,800 annually to pay taxes on all of their wages, like everyone else.

“The Koch brothers job is to do everything they can to dismember government in general,” Sen. Bernie Sanders says in this video. “If you can destroy Social Security, you will have gone a long way forward in that effort.”

The Koch echo chamber has been so effective that AARP, a traditional advocate and defender of Social Security, has repositioned its policy to open the door to cut Social Security benefits for dependents and beneficiaries.

Counter the Koch billions and protect social security. Create an echo chamber of truth and share this video with your friends and family.

The echo chamber, coupled with AARP’s shift toward cutting Social Security, pushes the argument further toward the Koch brothers’ goals. Influential opinion-shapers in venerable news outlets will react and have already begun to referee disputes on new ‘middle ground’ that has, over time and through the actions of AARP and the Koch echo chamber, grown tolerant of the Koch brothers’ talking points.

“The Koch brothers fund organizations, and you have economists and political scientists working there and they are very, very good at getting on television,” Sanders said. “They are very effective in getting their positions out into the media.”

That’s further personified by the Koch brothers’ lobbying. Koch Industries spent $857,000 on lobbyists in 2004, one year before George W. Bush tried and failed to privatize Social Security. They also donated $104,660 to his campaign. The attacks on Social Security needed more time to stew in the echo chamber before they could be mainstream, and given the increase in lobbyists, they have risen dramatically. AARP’s shift is more proof of the Kochs’ achievements.

In the first two years of the Obama administration, the brothers have spent $20 million on lobbying, according to the Center for Public Integrity. And they’ve diversified their donations to a slew of Republican opinion leaders and strategic Democrats who oppose revenue increases like Sen. Ben Nelson and Gov. Andrew Cuomo. And, with AARP’s action, the Koch echo chamber has broken ground on a new political terrain favorable to their ideological and financial goals.

Almost overnight, a historic and popular service, like Social Security, faces extinction. But behind this outcome, the Koch echo chamber has been churning for years.

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