Thursday, October 3, 2013

Observations on the Government Shutdown

An exceptionally bold gambit has been played by the faction of the Republican party that has brought the machinations of the Federal government to an unplanned halt.  No matter what side of the fence American's may find themselves with respect to the shutdown, the practice is revealing on a number of levels.  Among the revelations that have surfaced over the past 72 hours are the following:
  1. The Federal government has somewhere on the order of 800,000 “non-essential” employees. The President is the one who decides which classes of employees are essential and non-essential. The President’s choices provide an interesting insight into his priorities. The distinction between essential and non-essential functions should also inform future discussions about austerity.
  2. The President, in delaying the penalties for businesses with regards to the Affordable Care Act for a year, neglected to offer the same treatment for individuals. While on the surface, this appeared to be an administrative move, the faction of Republicans who are blocking a clean continuing resolution have called the President out on this slight of the American Public.
  3. Even if there was a clear administrative need to selectively apply the Affordable Care Act’s provisions, the act of selectively applying the laws provisions undermines the credibility of the law itself. This is a matter of principle that is worth standing up for. The fact that governance in America has degenerated this far and that it takes a budget or other fiscal crisis for an issue of such gravity to eventually rise to the surface is a national tragedy in and of itself.
  4. Despite daily appeals stating the contrary, the American Economy will eventually be much better off were the Government to remain shut down and allow the private sector to either take up the non-essential tasks or leave them undone as demand dictates.
It has been estimated that $60 billion per day is simply disappearing because the government is not spending it on the wages of non-essential employees. This simple analysis of the damage caused to the economy by the Government shutdown fails to see beyond what has disappeared and envision and recognize what will appear in its absence.  The reality, which has held true come debt ceiling debates, fiscal cliffs, and budget showdowns, is that the economy is likely to grow exponentially under current monetary policy, regardless of what the government does.

For more information on the effects of the Government Shutdown, click on the following link to see a brief video featuring Jen Markham, courtesy of Buzz:60