The shutdown's squandered opportunity
There are some important lessons to take away from the government shutdown. First, we learned never to underestimate the petulance of our fearless leaders in Washington.
We saw them kick people out of private homes and businesses on public land; order our veterans away from outdoor monuments in the nation's capital in a way that never occurred to anyone when the Occupy folks had taken over; saw federal employees prevent people from pulling off the road to look at Mt. Rushmore; and attempt to shut down private landmarks.
The most important lesson is the one that no one in Washington appears to have noticed: The shutdown provided a road map to a balanced budget. Instead of taking the opportunity to get federal spending under control, our representatives got right back on the taxing-and-spending train that brought us this mess in the first place.
Lest there be any doubt, consider what Treasury Secretary Jack Lew said on NBC's “Meet the Press” just days after the shutdown ended: “There's no question that the deep spending cuts that are part of sequestration are holding back the economy.”
Sequestration? The Treasury secretary would have us believe that these cuts, which trimmed all of $44 billion from the federal budget, are somehow a problem worth addressing in the face of a $900 billion deficit. The Treasury secretary, wringing his hands over four days' worth of federal spending, fiddles as Rome burns.
Had he been paying attention, he would have seen that the shutdown closed about 17 percent of the federal government — and no one outside the Beltway noticed. Or rather, we wouldn't have noticed if government employees hadn't shut down websites and national parks with such great fanfare.
It cost the government more to shutter its websites and national parks than what it saved. Those shutdowns weren't shutdowns at all; they were advertisements for government. Further, if no one really noticed that 17 percent was missing, we only needed to find another 7 percent to balance the budget entirely. With some will and some nerve, Congress could have truly balanced the budget for the first time since 1960.
Not surprisingly, Congress decided to go the other way. The House already has voted, unanimously no less, to provide back pay to the 800,000 federal workers who were furloughed. Is there any doubt that the Senate will not do the same? This means that, at least where salaries are concerned, the government didn't shut down so much as go on a massive paid vacation.
To put this all in perspective, IHS Inc., a global market-research firm, estimates that the direct cost of the government shutdown was $5 billion. Our government is so inefficient that it actually managed to lose money by shutting down. Impressive.
The shutdown could have been the first step in getting our economic house in order for the first time in two generations. But it turned out to be just another testament to our fiscal irresponsibility. This was the saddest and most predictable lesson of all.
Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan is a fellow of the Institute of Political Economy at Utah State University.