America Was Not Shut Down Properly: Reboot!
This great little graphic got us to thinking… and although everyone is already weary of the subject, we wanted to explore it through our unique Poligags lens.
This shut down never had to happen. It was never supposed to happen. Remember the Fiscal Cliff Showdown that concluded just this last January? The threat of sequestration was supposed to be so hideously terrifying that our elected officials would never allow us to reach that point.
Except that they did.
Ordinarily, the country operates on a fiscal year with – get this! – a budget. A budget that is cobbled together with elements from the separate proposals offered by the President, the Senate and the House. This has not happened for some while, and as a result, we have seen governance by crisis, lurching toward precipices set at three- and six-month intervals.
There was an 18-month period during which congressional leaders were supposed to have found that magical mix of cost cutting and revenue enhancement that would deliver on an agreed-to target. They failed to achieve that goal, and the result was The Sequester.
Except for the parts that were too inconvenient. Those cuts disappeared.
The current fight that we’re witnessing is over a stop-gap. A resolution that would only carry us through until December 15…whereupon, presumably, we would endure the same fight all over again. Still no budget. Still no agreement on national priorities. Still no acknowledgement that the Constitution demands that all appropriations made by Congress are valid debts that must be paid.
America was not shut down properly. And, with default now looming on the horizon, it appears that we’re going to be partying like it’s 1929.
The Great Depression followed a number of economic imbalances that eventually led to the stock market crash and years of economic turmoil and hardship. There are some parallels between events of the 1920s and recent years:
|Weak Banking Sector||Fanny / Freddie, the mortgage “bubble” and the government shut down leading economists to predict “deep” recession|
|Weak Agriculture Sector followed by the Dustbowl Era of the 1930s||Farm bill expired; no emergency response to the freak blizzard that killed tens of thousands of cattle due to government shut-down. GMOs, super-weeds, super-pests and pollinator-killing pesticides threaten a new “dustbowl”|
|Rapid growth in credit/loans increased people’s indebtedness; made “millionaires” on paper only||Stimuli encouraged large purchases – e.g., subsidized mortgages – increasing indebtedness. Income inequality at an all-time high|
|Reduction in economic confidence resulted in borrowers with high exposure to try to redeem their debts||Economic confidence stands at -34 with a high likelihood of worsening|
|Related to buying on credit was the practice of “buying on margin” and financing the remaining 80-90%||Inappropriate stimuli include low interest loans|
|Mismatch between production and consumption. Sales of cars, the demand for steel and a slowdown in housing construction contributed to a decline in share values||Manufacturing is not coming back. The foreclosure crisis continues. Many countries structured economies around exports, encouraging over-consumption by the US. Aggregate household consumption in 2009 was at an unsustainable 70% of GDP, according to the Journal of Accountancy|
America was not shut down properly. In the 1930s, the New Deal provided for jobs and infrastructure programs. It created the FHA and other consumer loan agencies. The Social Security Administration was founded.
Many argue that the New Deal did not dig America out of the Great Depression. What it did do, though, was to lay a foundation for an unprecedented period of economic stability that lasted for some fifty years until supply-side trickle-down Reaganomics began chipping away at the reforms and policies that yielded sustainability.
So go ahead. Reboot America – in safe mode, of course.
Just as the United States came out of the Depression stronger and improved, we can (we’ll have to) do it again. We will reinstitute banking safeguards such as Glass-Steagall. We will get the corrupting “dark money” out of government and reverse Citizens United. We will create jobs that also rehabilitate our crumbling infrastructure. We will cap the CEO to worker pay ratio. We will ensure healthcare for all citizens. And we will vote out the perpetrators in 2014. Reboot.
© 2013 Poligags
UPDATE: On October 16, the Senate passed a continuing resolution to reopen the government by an 81-18 margin. It then went to the House, where it also passed, 285-144. While good, keep in mind, we’ll be going through this again in January 2014…and that no fewer than 162 legislators chose to perpetuate the shutdown and risk the “full faith and credit” of the United States.