Should we Allow the Government to be Shut Down?

I wrote this post a few days ago in the heat of the political extravaganza that was the budget negotiations. Now that a deal has been reached this is probably no longer the hot button issue that it was, but I think the points I made are still just as valid.

Compromise is the favorite word in Washington these days. Reporters and Democrats in office say that compromise is needed in order to keep the government running before it shuts down this Friday. Plenty of doomsday scenarios will be thrown about, especially the idea that a shut down will stifle the recovery. But in the words of Obama, let us be clear, a shut down is the least of our worries.

Our national debt is past $10 trillion now, and the deficit in proposed budgets are also very large. So what is being compromised is not a way to deal with that debt (which, by the way, we are paying a ton of money to maintain), but rather this current budget which also looks to increase the debt. Democrats want to limit the spending cuts, and Republicans have become budget hawks. So right away, we should clear up this issue. What is basically being argued about is how much this budget will increase the debt.

But what about the argument that if we do not spend enough money or allow the government to shut down, that we will stifle the recovery? The contention, in short, is nonsense. A recovery for most people requires a growing economy. The economy grows when the wants of people are being satisfied more and more with time. So who knows what your wants are better: the government, or you? So then how does government spending increase the satisfaction of wants? Realize that we basically have a fixed store of economic value (though it grows with time), so when government spends more, it does not mean that total economic activity has increased. It only means that you have less to spend for yourself and government spends more deciding what you want.

There are many more arguments against government spending, but this should be the most convincing on a philosophical level. Though politicians and economists would not be convinced, they cannot ignore this basic fact. There also are the essential moral arguments such as property rights that government intrudes upon when it spends, but this argument has been ignored for centuries. So bring on the government shut down. It is not as if government spending ever made us better off than we would be without them.