Edge of Chaos is a political podcast starring Joe Ryan and Neurotoxin. Its aim is to have a free-flowing discussion of news and current events that also examines the empirical outcomes of public policy, avoiding biases based on ideology and policy intentions. Listener discretion is both advised and encouraged.

Monday, September 23, 2013

Govt Shutdown: Nobody Cares, As They Shouldn't.

It warms my heart to see how, in stark contrast to the past several times this has happened recently, there is very little hysteria about the possibility of a government shutdown. Let's try to understand why, starting with who it hurts, and who it doesn't hurt.

HURTS: On the list of shutdown losers is any organization directly on the Federal payroll. Federal employee unions are one example. Another class is Federal contractors, defined as any private corporation whom the government pays for their services; these include defense contractors, medical providers for anyone insured by Medicare or Medicaid, agribusiness that gets reimbursed for taking Food Stamps, and so forth. A SEPARATE class are private entities that are Federally subsidized, such as Wall St. banks that provide Federally subsidized loans, and anyone from McDonald's to Monsanto that gets a direct subsidy for their business.

DOESN'T HURT: Although hysteria in past times has circled around these entities, individuals on the Federal payroll including the military and social security recipients are NOT affected by shutdowns. Theoretically, the President has the authority to furlough them all and suspend their pay and Obama loves to threaten that as a political bargaining chip. But in practice, this is a disastrous idea that would bring mass riots, especially if it involves the military, and historically speaking - when push comes to individuals in Federal and State shutdowns end up paid in IOUs. IOUs can be redeemed with interest when the shutdown ends, and hence employees will usually sell them to banks and split the profit. Also NOT on the list are recipients of Federal assistance of any kind. Although payouts to the serving corporations are delayed, they are required to continue to take Medicaid, Food Stamps, and so forth. Non-profits that provide Federally subsidized services such as housing are also rarely affected, as well as academia. These entities operate on grants and grant application renewals are specifically timed in the fiscal year to avoid budget battles.

As you can see from this analysis, not only is a shutdown safe for average Americans, it is an excellent tool for forcing large special interests that rob us blind using Federal bureaucracy and corporatocracy to tighten their belts and share the pinch of the shrinking economy. In the recent history of looming shutdowns, the establishments of both parties joined hands to protect their respective affiliated special interests - resulting in large volumes of fearmongering and misrepresentation of how bad it would be and who it would affect.

However, the Republican establishment and its military industrial complex associates have already been defeated in that fight. After Romney had his ass handed to him by fringes in his own party sitting out the election and Congressional Republicans endured another wave of replacing old, crusty Neocons with actual fiscal conservatives - it became clear that no one wants to save the Military Industrial Complex from sequestration, and the sound rejection of interventions in North Korea and Syria put the exclamation mark on the political viability of more defense funding. The establishment Republicans who remain like John McCain and Mike Rogers are hopelessly outnumbered within their own party and do whatever the Tea Party demands under threat of being dumped from leadership positions.

This has left establishment Democrats like Harry Reid, Dick Durbin and Steny Hoyer in a purely partisan battle to protect their respective corporate associates in the health care, agriculture, and banking industries, as well as widely despised Federal employee unions. A pattern of these looming shutdowns in an age of decentralized media has also focused attention on people like myself, who systematically derail the lies and exaggerations and demonstrate that absolutely nothing will happen. All opponents have been able to do this time around is whine that Congressional Republicans are throwing a tantrum (as if Democrats are not); and disseminate very low-effort doomsday propaganda such as threats of canceled vacations in National Parks, delays on Federally subsidized loan applications, and the costs of the actual shutdown to the government (which amount to chump change compared to the cuts being proposed).

Hence, America's "shut it down, who cares?" attitude is not unsurprising, but it is quite fitting and appropriate. As I've been predicting for the last 2-3 years, Federalism is decaying as its opponents have gained power and dismantled the intricate web of lies that kept people addicted to it like a religion; and its apologists have less and less to defend it with, and are hardly even trying. Next time there probably won't even be a shutdown, just massive Federal cuts w/ out a real fight.


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