Government Shutdowns: A History

Though this is without doubt a conservatively biased report, it makes several good points. The first of these ¬†(& the only point I’ll discuss here) is that negotiation is a requirement to end any government shutdown.

This point shouldn’t have to be stated, but with both sides being so obstinate in their position, it has led to a perilous standoff. Perilous not because of the shutdown, though my sympathy to those who are furloughed, but because of the impending debt crisis on Oct 17th. A “crisis” that is caused by the government running out of borrowed money. Let’s think about this for a minute… I understand the difference between micro (individual/business) and macro (government) economics, so let’s use a scenario that work for either. A budget that is created to spend $ 100 a week is fine if there is at least $ 100 available to spend. However, a budget that is designed to spend $ 500 a week when there is only $ 100 available to spend is destined to fail. On a microeconomics scale, this would lead to a person or business filing bankruptcy (unless you’re a big bank, but that’s another article). When you have more debt than you do income, you eventually come to a pt where you can no longer “get by” on credit or with loans because no one is willing to issue you any more.

Now, let’s take this to the macro scale. in theory, other nations will stop lending us money because we have not demonstrated the ability to manage our finances. ¬†Then we will in fact default because there will be no other alternatives.

So how can we fix it? By eliminating superfluous costs (see government programs), by being selective with our relief and aid for other countries, by allowing agencies like the UN and Interpol to police the world… etc.