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Temporary U.S. Government Shutdown is Over, But Permanent Closure Would Not be So Bad

Politics / US Politics Oct 18, 2013 - 01:02 AM GMT

By: Casey_Research

Politics

By Doug Casey, Chairman

(Interviewed by Louis James, Casey Research)

The government shutdown is over, and many Americans are breathing a sigh of relief. But there's no reason to take a shutdown seriously in the first place, said famous resource speculator and libertarian freethinker Doug Casey in a recent interview—it was just a paid holiday for useless public employees anyway…


L: Doug, the topic of the day is the government shutdown—

Doug: If only it were true!

L: [Laughs] Don't hold back, Doug…

Doug: Well, it's Orwellian doublespeak to call it a "shutdown," when all they do is furlough a few nonessential personnel and then hire many of them back again the next week—with pay for the time off. The so-called shutdown is nothing more than a paid holiday for many federal employees.

It's business as usual in Washington DC. They close the Washington Monument and actually go out of their way to prevent people from even seeing Mt. Rushmore from the highway. It's strange that there still seem to be plenty of park police around to arrest you if you disregard the signs they posted saying everything is closed.

If only there were more Americans like those WWII vets who wanted to visit the WWII Memorial. If they hadn't been a bunch of old guys, some in wheelchairs, who can say there might not have been another incident like the one last week in which Miriam Carey was murdered by police in her car, even though her baby was in the car as well. Despite the fact that she had no gun, this act was applauded by congresspeople.

Then there was the chap who self-immolated the next day in sight of the Capitol, and the story of ordinary, peaceful tourists being evicted by gun-toting squads in uniform from Yellowstone Park—these are strange days. I think we'll see more of this, stemming from a strategy to inconvenience people as much as possible, generate anxiety, and make them believe that they need the government.

L: Perhaps so, but not to get sidetracked, some government workers have been told to stay home and are not being paid. Won't that save the US taxpayer a little money?

Doug: No. Not at all. These people are all going to get back-pay when they return to their places of employment—I hesitate to say "work," since what most of them do is unproductive or counterproductive activity, not work. The problem is that citizens who need their papers stamped, permissions granted, and so forth are forced to sit on their hands in the meantime.

So the economic losses blamed on the shutdown are caused not by the fact the government employees aren't at their desks—but by the fact they're made artificially necessary in the first place. They'll put them all back to work soon enough after their paid vacations. And then many will be able to collect overtime pay to catch up on the backlog. The backlog will be a good excuse to hire even more of them.

I promise you that absolutely nothing will change because of this exercise in Kabuki theater.

Don't be fooled: while the rate of increase may be trimmed at times—with much fanfare about "cuts" that are nothing more than reduced increases—the overall trend is relentlessly upward.

There is simply no political force in the United States to stop it.

It's like the Fed's purchases of $85 billion of paper a month: if they stop, the chances are excellent it will bring the house of cards down. They've painted themselves into a corner.

L: Fine. I see it the same way, but let's go back to your first statement. If the government were truly shut down overnight, wouldn't the resulting chaos give pause to even an anarchist like you?

Doug: People said the same thing about ending slavery in the United States; freeing the slaves all at once would result overnight in a large fraction of the population with no education, no money, and no prospects being left to their own devices. It was said that this would lead to great calamity and bloodshed. But when the slaves were freed, they immediately got to work turning fallow land into prospering farms and building whole new towns from scratch.

Another example is offered by the demustering of 10 million servicemen after WWII. Many people feared that would result in chaos—but just the opposite happened.

Today, if all these government employees were permanently unemployed—fired—and their jobs abolished, it would be a huge plus for all concerned.

Of course, there would be some unpleasantness if the US government disappeared overnight, but only from those who have come to depend on it. Americans who actually produce something would have cause for celebration. Let me re-emphasize something that many people forget: There is absolutely no needed or wanted service provided by the government that wouldn't be provided—undoubtedly much better and cheaper—by entrepreneurs if the government disappeared. Further, we'd have vastly more goods and services if the state weren't there to prevent their creation. The economy would go into a super boom after the distortions that have been cranked into the system over decades were eliminated.

(Doug Casey is the master of radical solutions… so how does he think the US government's debt problem should be solved? Click here to read the full interview—including Doug's astonishing answer and his warnings of the economic turmoil you should prepare for.)

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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