A government shutdown would lead to homeless wandering the streets, a national unemployment problem, a vicious power grab by Wall Street’s elite, and a rush by Americans to hoard precious assets such as gold (NYSE:GLD) and silver (NYSE:SLV).
So what else is new? By those measures, the government’s been closed for months.
The gridlock in Washington is manifesting itself in the worst way possible this week, with both sides dug in and President Obama warning of dire consequences if the government grinds to a halt this weekend — from the furloughs of 800,000 federal employees to the freezing of paychecks issued to military personnel.
And while few people will mind seeing the IRS shuttered the week before taxes are due, the threat to close the Cherry Blossom Festival in Washington is just dirty politics.
None of this will be taken seriously by the American public, however, until the government actually does shut down. Posturing, threats and finger pointing have become the norm not only in Washington in the Obama era, but in the national debate as well. The seething anger underlying both party platforms these days is unhealthy to the republic.
A civics lesson is in order.
Americans need to see first hand what small government really is. To have their parks closed and their work permits halted and their government subsidies and environmental projects frozen. The truth is, we rely on the government for a lot more then we think, and we can’t just kill the programs that don’t affect us.
A little demonstration of what it’s like to live without order is in order. It’s happened before — twice, in fact. The stock market actually rose when the government shut down in 1995 and again in 1996, though those were only brief shutdowns. If we decide to prolong it, I’m sure Goldman Sachs (NYSE:GS) and J.P. Morgan Chase (NYSE:JPM) would be happy to step in and take control of the Treasury for the time being while the politicians roll in the mud. I’m sure our allies would barely notice if we replaced the bald eagle with the vampire squid.
We rail against Wall Street and its banks (NYSE:XLF), with their obscene profits and, um, balanced budgets, but we then expect that they will take direction or have financial reform shoved down their throats by a government that can’t even remotely keep its house in order.
No wonder the big guns in the banking industry, led by the suddenly laissez-faire Alan Greenspan, have set their sights on the Dodd-Frank reform bill. Like aggressive dogs, they smell fear. It has no chance, despite its positive aspects.
We are embarrassing ourselves globally with this type of infighting among our elected officials, and only an actual shutdown will be enough to jolt them out of the dramatic thrill of their petty feuds on Capitol Hill and in the White House and into the reality of what their duties to the country really are.
By some measures, this is just an annual flare-up in the Capitol that this year has gone a little too far because of the makeup of Congress after last November’s elections. Some agreement will likely be reached, if not by Friday’s deadline then sometime over the weekend before the full scale of the shutdown could be felt Monday.
Even if a shutdown did go beyond the weekend, the government has pledged to continue what it considers essential services, such as managing the armed forces, paying out Social Security and collecting taxes (at least electronically). So the shutdown would be more of a bluff than an actual, chaos-inducing, riot-inspiring lockout.
Still, it would allow America to look at its government, if only fleetingly, for what it does and stands for in this country, rather than just as the late-night talk-show joke it has become. I, for one, would be happy to hold back my federal tax payment next week for that privilege.
David Callaway is editor-in-chief of MarketWatch.