Ousted Egyptian President Muhammad Morsi had been a miserable leader. He broke many promises starting with the Muslim Brotherhood’s promise not to run a candidate for President just yet and to lead an inclusive government. He forced through a new constitution without proper consultation or broad support, and failed to address Egypt’s many economy and political problems. He deserved to be replaced, but doing so by military coup seriously harms Egypt and the entire Middle East in several ways. The failure of the Obama administration to acknowledge the act as a coup deprives the English language of any meaning.
Obviously it is a set back for democracy. Morsi’s growing opposition should have organized to defeat him in the next election. Given his miserable performance it shouldn’t have been difficult. That would have strengthened democracy rather than weakened it. One coup begets another until a leader can coop the military.
The more serious harm is to the social and political conditions needed for diverse people (Muslims, Christians, secularists, Jews) to live peacefully together. What, pray tell, do the secularists and military think the Brotherhood and their supporters will do after being removed from their elected positions and arrested? Go sulk in the Old Cataract in Aswan (of which I have very fond memories)? There is a high probability that they will resort to violence. As the Army kills more and more demonstrating Morsi supporters, the prospects of an insurgency increase rapidly, as occurred in Iraq and so many other places.
It has already started. In Egypt’s Sinai Peninsula: “The rapid thud of machine-gun fire and the explosions of rocket-propelled grenades have begun to shatter the silence of the desert days and nights here with startling regularity, as militants assault the military and police forces stationed across this volatile territory that borders Israel and the Gaza Strip.” (The Washington Post, July 29, 2013, page 1) Hundreds have already been kill by the military or insurgents and the violence is growing rapidly. How could it be otherwise?
And it is spreading. Tunis has been the most promising model of transition to democracy. Following the assassination of two opposition leaders in Tunis, mass demonstrations have escalated into terrorist attacks that killed eight Tunisian solders Monday. President Moncef Marzouki, Tunisia’s moderate Islamist president, stated in a television address that “In all countries of the world, when the state faces a terrorist attack people come together. But I don’t see anything like that happening in Tunisia. All we see is divisions and chaos.”
U.S. law requires the administration to cut off aid to governments that came to power by coups. This is clearly the case in Egypt and aid should be immediately suspended. For decades U.S. aid to Egypt has ranged between 1.5 and 2 billion dollars per year, over 80% of which is to the military. Congress would surely quickly suspend this provision for Egypt but should attach conditions for any resumption of aid. These conditions should call for restraint on the part of the military, free and open public debate, quick elections, and broad participation in the redrafting of the constitution.
The already troubled Arab Spring has had a series set back.
Warren's space 
The following comments are from a friend who for work reasons cannot give his name:
Warren,
Thanks for your insights on what I fear has become a hopeless situation. Pious Muslims obviously comprise a substantial majority of the Egyptian population; they want an Islamist state, sharia law, and were perfectly happy with Morsi’s “program,” if that mess of pottage can be so dignified. The military will ultimately be constrained to hold the famous “one free election, one time,” leading to the election of Morsi, or perhaps someone else, and a government that will then proceed to ignore the niceties of “democratic” government. There will be an Islamic state that will, through sloth, corruption, and plain old incompetence, wreck what is left of the economy, most likely leading ultimately to a failed state. Saudi Arabia and the Gulf States will withdraw their subsidies. Tourism will be dead for at least a generation. Egypt will descend into near chaos, hunger will stalk the land, and perhaps the lights will go out. Heaven only knows what will happen along the Israeli-Egyptian border. And no doubt, with the characteristic Arab Muslim penchant for revenge, they will also cheerfully spill enormous amounts of their opponents’ blood, including that of secularists, moderate Muslims, and the poor, blameless Copts. The United States should be prepared to receive hundreds of thousands, perhaps millions, of refugees from the aforesaid groups. This will be a huge loss for Egypt, since they comprise the most productive and entrepreneurial elements of the population. On the other hand, their presence will be a bonus for our country, so there’s the silver lining in the tragedy. That scarcely compensates for the impending ruin of a nation, however. It’s happened before in Egypt: I remember as a child being fascinated by “Ozymandias,” Shelley’s tribute to the ruin of ancient Egypt:
“I met a traveler from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them in the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed:
And on the pedestal these words appear:
‘My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.”