When Government Shuts Down…(Yipee!)

Thursday, July 28, 2011
By Paul Martin

by Llewellyn H. Rockwell, Jr.
LewRockwell.com

From The Free Market, December 1996.

According to official history, the 104th Congress doomed itself when it shut down the government to force its budget priorities on the president. People got up in arms and demanded that government be reopened. This taught the people and their representatives a valuable lesson. As much as we may complain, we truly need big government. Today, we all agree with the White House vow to never allow the government to shut down again.

Of course, everything about this story is nonsense. Shutting down the government was this Congress’s most noble act. Though the freshmen, who forced the closing against the leadership’s wishes, didn’t properly prepare for the inevitable response from the media and the bureaucracy, they were on the right track. It may have been the only principled act in two years of political compromise.

Moreover, nobody has produced a shred of evidence that the government shutdown was as unpopular as the media claimed it was. It was asserted daily, but never proven. Oh sure, we heard about how people couldn’t get passports, couldn’t get into Yellowstone, couldn’t see the Vermeer art exhibit at the National Gallery of Art. But what’s most startling is that the central government – which consumes 40 percent of the national wealth – wasn’t missed much at all.

There was a fiscal illusion at work. At issue was a budget authorization that entitled government to spend money before it was there to spend. But government could have reopened, and run based on present receipts. That way the budget would be immediately balanced. Everyone claims to want pay-as-you-go government, but nobody suggested this as an option. They acted as if debt finance is part of the natural law.

The Rest…HERE

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