The Shutdown and the Lying Epidemic | SchiffGold

A government shutdown is often more of a spectacle than a reality. The long-term effects are minimal and the workers going without pay are paid as soon as the new budget is put into place. While some capitalize on the inherent, dramatic nature of the moment, most seasoned political vets see it as a bargaining formality that will eventually work itself out. Although the shutdown is primarily for both sides to show their commitment to their causes, this time, it whispers of a more troubling reality that neither side would like to address. The Democrats want to avoid reducing healthcare coverage for the poorest in society, and the Republicans want to cut costs in that area to fund other interests. If either party were to give up on a policy priority to avoid shutdown, it would be of grave danger to their electability. Politicians are elected on their ability to bring about a set of outcomes for their constituents. Right now, the shutdown situation is bringing into question the ability of both Republicans and Democrats to satisfy their bases. What appears to be a battle about specific policies has actually revealed the desperate survivalist instinct of American politicians who must cling to support even as they know the dire state of the country. The debt load and the accelerating decline of the dollar force politicians to choose between admitting they can’t deliver and growing the debt burden they know is destroying the nation. 

The US debt has grown at a rate of $68,911.98 per second for the last year, and neither party has put forward a seriously anti-debt candidate in years. Bias towards the present and a misunderstanding of economic growth have led Americans to vote for candidates who promised a rosy reality that can only be purchased through the selling of their children’s futures. While it is impossible to understand the implication of a specific fiscal policy far into the future, even the most erudite thinkers can understand that present spending beyond our means must be paid back in the future. The debt has not been dealt with for the exact same reasons that it was initiated. People prefer present happiness to the uncertain future rewards of present diligence. Good institutions can keep this instinct in check, but the democratic core of the US governmental system allows misconceptions and hedonism to overpower basic principles of responsibility. It is quite easy to stir up excitement for more spending, particularly when it’s marketed as a solution to more spending in the past. Both parties point to the spending of the other to justify their own budget choices. The shutdown shows both parties unable to own up to their lie that they can fulfill their promises without any consequences. Shutdowns in the future can only be avoided when the reality of our boundless spending has been acknowledged and governance is seen as a series of painful tradeoffs.  

While the strength of the dollar was once the strongest protector of American economic strength, it is no longer protection but a sinking foundation. In the past, Americans and the government could afford to bet on the success of the dollar, because it simply kept outperforming other currencies. The weakness of Europe and the poor economic system of Russia gave us a short period of dollar dominance. The underlying understanding of economics behind the Fed along with its current dubious independence, have teamed up to cut the dollar down to a more accurate representation of the irresponsible government behind it. Lawmakers can feel this shift and it only adds to their concerns about the debt burden. However, the only way they can become elected is by promising things that cost a lot of money. It is impossible for them to turn a blind eye to the situation that is continually shrinking government wealth. Maybe it takes something this drastic to get them to think about anything other than political opportunism, but the response of digging their heels in is the only thing they have been able to do. The present threat of the other party gives them an easy distraction from the existential threat of monetary devaluation, and the shutdown is just another way of reinforcing this lie.

The shutdown shows how politicians would rather fight over scraps in the street than acknowledge the situation and move to a better situation. An acknowledgement of the situation could lead to bipartisan action, even in this hostile political world. Milton Keynes, the grandfather of modern monetary policy once said that “in the long run we are all dead.” While he said it as a witty quip, it gives insight into the deeply irresponsible views that have shaped our generation of leaders. Whether in Congress or the Fed, a denial of accountability will make recovery impossible. The pathways to power do not reward those who promise less, and partisan battles give a compelling survival mechanism for those who promise much and offer little. The shutdown is little more than a manifestation of fear for what they all know will come, and they simply cannot stop hiding the truth.

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