I noted earlier that South Carolina’s state House gave in to a temper tantrum thrown by online retailer Amazon, granting the company an exemption from collecting sales tax, in addition to “a free site to build [its new South Carolina] facility, property tax breaks on equipment, [and] job tax credits from the state.” The South Carolina state Senate, meanwhile, is cooking up a budget that includes $100 million in corporate tax breaks.

At the same time that it is serving up all these corporate goodies, South Carolina is moving to cut aid to two of its most vulnerable groups of residents: low-income families and the unemployed. Already, the state has reduced its benefits under the Temporary Assistance for Needy Families (TANF) program by 20 percent to $216 per month, which is just 14 percent of the poverty line. And as The Huffington Post’s Arthur Delaney reported, South Carolina is also looking at cutting its unemployment insurance system:

The South Carolina State Senate gave preliminary approval last week to a bill that would reduce state unemployment benefits from 26 weeks to 20 weeks while simultaneously cutting unemployment surtaxes for businesses. In recent months Michigan and Missouri cut benefits to 20 weeks, and Florida and Arkansas have slashed aid as well. Those reductions served as models for South Carolina, where the idea to decrease the number of benefits popped up in the last few weeks.

As Heather Boushey and Danielle Lazarowitz pointed out, cuts to jobless benefits can stifle economic growth and increase poverty. In fact, the Center on Budget and Policy Priorities released a good chart today (based off of this study) showing that public programs, including TANF and unemployment benefits, successfully keep millions of people out of poverty:

However, government expenditures have recently shifted “away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased.” South Carolina, if all of the ideas being proposed become law, will certainly not help reverse that trend.

Several states around the country, in an effort to deal with huge budget shortfalls, have been attempting to close tax loopholes that let online retailer Amazon operate in their states without collecting sales tax. Even notoriously anti-tax Texas came after the company for $269 million in uncollected sales taxes.

By refusing to collect sales taxes, Amazon not only denies state’s desperately needed revenue, but it is also able to undercut local businesses. And the company responds to any attempt to do away with this tax preference by threatening to close plants and move elsewhere. Amazon actually closed a Dallas distribution center over its spat with Texas. Amazon CEO Jeff Bezos also claims that forcing his company to collect sales taxes would be unconstitutional, which, as my colleague Zaid Jilani noted yesterday, is bunk.

Last month, South Carolina’s state House, by a 71-47 vote, refused to grant Amazon a five year exemption from collecting sales taxes. The company then threw a temper tantrum and stopped building a distribution center in the state. Now, after Amazon promised to create more jobs than it had initially estimated, 49 members of the South Carolina House flipped their vote and approved the sales tax exemption:

After a dramatic turnaround Wednesday in the House, the battle to win a prized tax incentive to lure Amazon.com moves to the state Senate, where the online retailer’s support has not been tested. A 97-20 tally — aided by 49 legislators, mostly Republicans, who switched their vote — handed the Seattle-based company a real shot at receiving a five-year exemption from collecting state sales tax on each purchase by South Carolina shoppers.

“It obvious to me that dubious last-minute promises influenced some legislators to flip-flop on the vote,” says Brian Flynn with the South Carolina Alliance for Main Street Fairness. The tax exemption will be provided “on top of a free site to build the facility, property tax breaks on equipment, job tax credits from the state and repeal of Lexington County’s ban on Sunday morning retail sales.” Gov. Nikki Haley (R-SC) said that she is opposed to the exemption, but won’t veto the bill, which still needs to pass the state Senate, if it comes to her desk.

As Jilani pointed out, “it’s crucial that states are able to excise their powers of taxation to get revenue from transactions occuring within their territory, given that state governments are losing millions of dollars thanks to tax dodging by big online retailers. As just one example, in ’2011 alone, Wisconsin will lose an estimated $127 million in uncollected sales tax on purchases made online.’” But instead, Amazon bullies weak-kneed legislators into giving away huge concessions, in return for jobs that may or may not materialize.

Several Congressional Republicans, including Sen. Pat Toomey (R-PA), have posited that failing to raise the debt ceiling — and thus forcing the U.S. to default on some of its obligations — would not be bad for the economy. “I don’t think it’s going to have an adverse impact on the economy for the days or weeks or perhaps even months that this would continue,” Toomey said.

These “default deniers” don’t believe that failing to raise the debt ceiling would have the negative consequences that most economic analysts say it will. Radio shock-jock Rush Limbaugh even said yesterday that failing to raise the debt ceiling will improve the nation’s creditworthiness.

Rep. Devin Nunes (R-CA), though, believes that default would cause a “crisis.” But, as he told Politico, he actively wants it to happen anyway:

Nunes says the debt cap must be raised at some point but not necessarily before the point of default.

“By defaulting on the debt, in the short and long term, it could benefit us to go through a period of crisis that forces politicians to make decisions” on major policies that affect the budget, he told POLITICO.

The GOP has been playing chicken with the debt ceiling for months, but Nunes is now advocating outright default and all of the consequences such a default would bring. As Princeton Professor Alan Blinder noted in the Wall Street Journal this morning, the U.S. defaulting on its obligations could eventually “reignite the world financial crisis”:

Should it occur, the consequences could be severe. It might, for example, reignite the world financial crisis. Remember how rattled financial markets became last year when it looked like Greece might default? And that was just little Greece and the possibility of default. An actual default by the mightiest nation on Earth would be immeasurably more unsettling. Where, in such a case, would frightened investors run to hide? The U.S. dollar would be among the first casualties. If hot money were to flee what was once its safest haven, the dollar would sink and U.S. interest rates would rise. The latter could lead us back into recession.

There would also be lasting costs to the U.S. government in the form of higher interest rates…How much? Again, no one can know. But even if it’s as little as 10-20 basis points on the U.S. government’s average borrowing cost, that’s an additional $10 billion to $20 billion in interest expenses every year. Seems like an expensive way to score a political point

Bank of America analysts agreed, noting that not raising the debt ceiling “would likely push the U.S. into recession and drag down the stock market.”

Rep. Michele Bachmann (R-MN) said earlier this month that “no one is advocating defaulting.” But it seems, for the House Republicans at least, that is no longer the case.