Would government shutdown hurt the economy?

We’ve been reading and hearing opinions in the news about the effect of shutting down the federal government for a day or two, or maybe even more. Reporters talk as if state and local governments haven’t been doing that all over the U.S. for the past couple of years, and as if the prospect heralds a looming disaster.

They dutifully report the President’s remarks that shutting down a few government offices could “jeopardize” the “fragile” economy. Okay, he didn’t say the recovery was fragile, but the implication was clear.

But CBS went on to note that:

Mr. Obama says “we’ve got to stop spending on things that we don’t need.” And though he calls for compromise, he is adamant that some programs are too important to be cut, citing education, infrastructure and clean energy initiatives.

Problem, to the best of our knowledge, is that there are no proposed cuts in those programs, though we think that the federal government has no business spending a cent on “education;” that infrastructure, in the form of highways is self-funded with the gas tax and state taxes, and therefore not on the chopping block; and that clean energy initiatives are chasing a will-o’-the-wisp.

Other threats include the frightening prospect of closed parks, museums, passport offices and the IRS! Ooohhhhh… please, no, not that.


If that’s what it takes to start to get federal spending under control, IFO is all for it. And yes, leaving proportionately more money in the private sector is good for the economy. Don’t believe it? Just ask Greece.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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