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The Government Shutdown and the World Didn’t End – Whooda Thought?

Yesterday was The Big Day – or so we were told (endlessly). If Democrats and Republicans in Congress failed to reach a budget agreement, the government would have it’s shutdown, and all kinds of bad things were supposed to start happening.

But – low and behold – here is just a short list of the cataclysms that didn’t happen:

  • 99.9% of Americans who were employed on Monday, went to work and had yet another ordinary day on Doomsday Tuesday.
  • The electricity stayed on, and the water kept running. Our neighbors even had garbage pickup, right on schedule.
  • There was plenty of food in the grocery stores – I know because my wife went food shopping last night. And there were no lines.
  • Gas stations have plenty of gas – and the price didn’t even go up in reaction to the “crisis“ in Washington. And once again, no lines.
  • The stock market – that bastion of cowardly capital – even managed to eke out a small gain. Commodities hardly reacted.
  • No countries anywhere in the world were invaded, in the event that a power-hungry dictator might have wanted to take advantage of America’s sudden obsession with it’s own domestic fiscal problems.

In point of fact, apart from the media frenzy, Tuesday, October 1, 2013, was by all accounts a very ordinary day. Yah can’t even get a good manufactured crisis off the ground any more!

And manufactured is exactly what it is. I think most of us already know this, hence the calm throughout the country.

Separating reality from the media version of it

The Government Shutdown and the World Didn’t End - Whooda Thought?
The Government Shutdown and the World Didn’t End – Whooda Thought?
The media have a big hand in this circus (that‘s not a typo – I meant circus, not crisis). On one hand – obviously lacking any news of real substance – they’ve been all over this unfolding story, pulling out their best the sky is falling routine. But when you’ve done this as many times as they have, the people just kind of know better. That’s fortunate for all of us.

And on the other hand, the media have for years kept us so distracted with cheap, sleazy entertainment, sensationalized non-stories, and opinion-passing-as-news, that even if this were a serious crisis we might not be able to perceive it. In the computer world the term is GIGO – garbage in, garbage out. The media have fed us too much garbage for too long.

Still, you can’t help but notice that the media are having a feeding frenzy on the government shutdown. You can bet that the members of Congress – from both parties – are also reveling in all of the extra media attention. The grandstanding is as obvious as it is nauseating.

I think we’re all getting that.

We’ve been down this road before

Giving lie to the government shutdown frenzy is the fact that we’ve all been down this road before. In fact, we’ve had 18 federal government shutdowns since 1976, and several more threatened. It’s hard to get excited about these events when they have become so common, and the outcome is always the same – a certified non-event.

It happens so frequently that it has become part of business as usual in US politics. Italy is notorious for changing governments about every two years. But in the US, the government shuts down with almost the same frequency. Different countries, different styles – what can we say?

What’s really going on

While it is commonly referred to as a “government shutdown”, it’s actually nothing of the sort. Since our government is in perpetual deficit, Congress needs to increase the national debt limit about every two years. If there is any opposition to the increase, it can result in the situation we now have.

But let’s call this when it really is – a partial government shutdown. It’s actually nothing close to a complete shutdown. If it were, we might actually be facing a doomsday situation. All funding to all government activities would come to an immediate halt.

What’s really happening is that the government has run out of borrowing authority. That authority can be restored by the same Congress that has forced the partial shutdown. That’s why this is a manufactured crisis, and not a real one. Anytime they want, Congress just has to approve yet another increase in the federal debt ceiling.

And we all know how it ends. After a few days, or a couple of weeks, Congress will magically find common ground, increase the debt ceiling yet again (was there ever any doubt?), then restore all the “cuts” that the government so unfairly suffered with during the shutdown. No one will lose a thing. No budgets will be cut. No federal jobs will be lost. No one misses a Social Security check. And the military isn’t mothballed.

What should be obvious to us all

Let’s step outside the shutdown festivities for just a moment. The real problem here is not the alleged shutdown. It’s the fact that the United States government cannot live within its means. It’s also the fact that the American people so comfortably tolerate the fact that their government can’t live within its means.

If we had a balanced budget, there would be no bi-annual budget showdown with all the attendant silliness. This happens because every two years we need to increase the debt ceiling by another $2 trillion or so. That’s just plain disgusting. And it’s the elephant in the room that no one is discussing in the midst of yet another big, bad budget showdown – an exchange that will fix precisely nothing

We’re on our own – get used to it

As I said above, Americans have gotten too comfortable with perpetual deficits. I would offer that it has to do with the greed factor. As citizens, if we can collectively get $4 in government benefits for every $3 dollars we pay in taxes, that’s a gravy train that no one wants to get off of. It’s unfortunate, but it is also obvious that this kind of thinking is now part of the national psyche.

People superficially complain about the national debt, but:

  1. They are addicted to the benefits that they get from it,
  2. they see no apparent downside to the deficits-forever modus operandi of the US government (thank you Federal Reserve – we can‘t do it without you), and
  3. are terrified at the prospect of any changes that might put a stop to our dysfunctional, fantasyland business-as-usual complacency.

I guess what I’m saying is don’t expect any of this to change, at least not anytime soon. It’s been going on all of my life, but I take no comfort in that fact that all. Perhaps because it has all become so common, that we fail to notice that the fiscal problems are gathering steam. For example, in 1980 the national debt was around $900 billion, or about 30% of gross domestic product (GDP). Today, the national debt stands at around $17 Trillion, and is more than 100% of GDP.

That’s not business as usual – that’s a rapid deterioration. It’s guaranteed to get worse, because there is no national or political consensus to make it better. None. It’s always a fight over how best to keep or expand benefits, but never to deal with the deficits that they cause, at least not seriously.

What does that mean for us as individuals? We’re on our own! The politicians and self-styled wizards at the Federal Reserve can and will do little more than keep the sinking ship afloat a little bit longer. There’s nothing they can or will do to help us.

That should have serious implications for us personally.

Keep your own financial house in order. Update your skills, take on new jobs responsibilities and business ventures, developed multiple sources of income, save money, stay out debt, be purposeful about your faith, take care of your family, and bond with your community. And if you rely on government benefits of any sort, you might want to work seriously on reducing your dependence.

Rest assured that the future is very unlikely to be as calm and predictable as the past. Sooner or later, the happy little delusion of business-as-usual will be clobbered by the irresistable force known as Reality. A very ugly reality. Now is the time to start shifting gears. If it won’t happen collectively, then we need to do it individually. Think you’re up to it?

Here’s a semi-related question we should all spend some time pondering: Is it at all ironic that the government is having a self-engineered shutdown on the very same day that it rolled out the biggest spending shift in world history – the “Affordable” Care Act?

( Photo by tomblanton1957 )

4 Responses to The Government Shutdown and the World Didn’t End – Whooda Thought?

  1. As part of the millenial generation, I have given up on our governments ability to accomplish anything meaningful at this point. If anything, its more to be considered entertainment on the same level as Nascar, NFL or (closer to reality, Wrestling such as the WWF). The different groups of fans (Political parties) gather to cheer on and wave signs at their favorite (Team? Wrestler? Driver?)

    Meanwhile, nothing truly useful is being accomplished. The Affordable Care act looks to be attempting to drive the cost of healthcare down by mandating insurance, meaning that providers do not get hosed as bad by those with no insurance. Problem is it does nothing to address any of the structural reasons for high costs (to be a doctor you need $500k or so of student loans and $150k or so for your first years worth of Malpractice just to punch in and walk into work.

    In the future the government inability to solve anything at any time will only get worse. The advice of developing multiple income streams and a diverse skillset works for not just for individuals, but communities at large. Sooner or later, States, Cities and small towns will start running into problems which the Federal government was traditionally expected to handle. The more robust and reliable the individual economies, and the more capable of any area of raising a group of people with useful skillsets to address any given problem, the more likely these areas will thrive into the future.

  2. Hi Jared – It would be downright comical if it weren’t so serious, wouldn’t it? But this is the reality of our time. Government is engaging in theater at a time when we have so many structural problems that need to be dealt with. But I think this is the real reason for all the grandstanding and phoney crises – they have no clue what to do about the real problems, and prefer to trump up sideshows as diversion and small political battles.

    Until some of them come forward and say “here’s what we’re going to take away in order make things work better and get the government out of everyone’s face”, nothing will get better. In the meantime, we’d better find solutions in the mirror and closer to home.

  3. You are right about the government shutdown, it has happened numerous times in the past. The founding fathers actually liked government shutdowns. Yea, its amazing the amount of gamesmanship and blame the two parties are doing. On the bright side, maybe this will result in an incumbent revolt in 2014 and we can get new people in there!

  4. Hi Jim – I hadn’t thought about that possibility, but that would definately a silver lining, wouldn’t it?

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