As I write this, your social media feed is blowing up, and news syndicates are portraying the downfall of society. The economy is in crisis. The Dow Jones Industrial Average is down 20 percent, and life savings are in ruins. Chaos is breaking out in the streets as commerce comes to a screeching halt…
Or at least that’s the picture of the future the media presented in the run-up to the current federal shutdown. In reality, the government shut down, and the markets are still open. In fact, they generally closed about 1 percent higher Tuesday.
For all the media attention, no one really seems to care about the shutdown.
Of course, the media needs this to be a crisis so we’re all glued to our screens at midnight, waiting to see what terrible event happens next. But a cursory look into the history of government shutdowns shows that they have occurred many times in the past with minimal consequences.
There were seven government shutdowns in the 1980s alone, and most of them ended within days. Not to mention Australia’s government shutdown in 1975, which resulted in the Queen firing every single member of Parliament. I wonder if Obama could do something similar.
Instead, we’re stuck here weathering the platitudes coming from Congress and the rebel yells of doomsday predictors who think their underground shelters have finally been vindicated.
The only real threat to the economy is if America sees a repeat of 1995 and 1996, when the government was shut down for 21 days. Even in that case, there was minimal damage to the economy.
While the debt ceiling is usually a distraction, its continued use as a bargaining chip is frustrating. The Republican leadership won’t actually allow America to default on its debt, and the Democrats know that. All the Republicans are doing is giving the Democrats more ammunition against them while gaining no advantage in policy.
If the Republicans wish to gain any ground on the political spectrum, a serious reconsideration of their tactics is in order or division between the parties will continue at the country’s expense.
While the debt ceiling’s effect on the economy is minimal so far, it does foster unnecessary uncertainty. A better alternative to the current system would be to allow the president to raise the debt ceiling unilaterally. If the debt ceiling increase is unreasonable for some reason, Congress could still vote to block it with a majority vote, but it couldn’t be filibustered forever by the minority party like it has in recent history.
This alternative will contribute to the long-term stability of the economy and will let politicians argue over more important matters instead of grandstanding for the next election cycle, a practice that should have been abandoned long ago due to its obvious inefficiency,