Short-lived US Government Shutdown
by Stephen Lendman (stephenlendman.org – Home – Stephen Lendman)
Shutdowns occurred 18 previous times, the longest in 1996, lasting 21 days.
The second one under Trump in the past three weeks, occurring after midnight Thursday, was resolved quickly. Neither party wanted it to last.
Overnight, Senate budget legislation passed overwhelmingly, not before shutdown occurred after Senator Rand Paul delayed voting past midnight, objecting to GOP failure to stick to 2011 budget caps and fiscally conservative policies.
On Fox News, Paul said Washington “spends too much money, borrows too much money, and actually we’re going to bring back Obama era deficits. I was elected to combat Obama era deficits.”
US deficits occur in nearly all fiscal years. The nation has a long history of indebtedness from the republic’s early days.
Andrew Jackson was the only president to eliminate US debt entirely. It was about $1.4 billion in current dollars. Today the national debt is $20.6 trillion.
Deficits occur almost annually, balanced budgets or surpluses rare. Deficits explode in wartime. They rose sharply under Bush/Cheney and Obama.
Because of the great GOP tax cut heist, budget experts estimate the US FY 2018 deficit at $1 trillion or more, continuing high in subsequent years.
David Stockman believes the tax cut will add trillions of dollars in federal debt. He estimates it rising to around $35 trillion by 2028, causing enormous economic harm, saying:
“Whatever expansionary impulses that do remain in the US economy are about to get smothered by the impending collision between soaring debt issuance by the US Treasury just as the Fed prepares to dump upwards to $2 trillion of existing debt securities into the bond pits.”
“The punters on Wall Street have been so addled by years of Fed monetization of the public debt that they now think rising yields are a ‘good thing’ and reflect rebounding economic growth. No they don’t!”
“The only possible way to accelerate growth in a 104-month-old business cycle – where household consumers are impaled on a record $15 trillion of debt and other liabilities – is through an outbreak of capital spending.”
So far, companies have been largely focused on stock buybacks, increased executive pay and bonuses, along with mergers and acquisitions.
There’s no way out of “the fiscal trap…short of a thundering financial collapse,” Stockman believes.
Stockman earlier called Fed quantitative easing (QE) “high grade monetary heroin,” believing one day it’ll “kill the patient.”
He called the current equity market swoon “a minor warm-up for the main event.” The fullness of time will tell.
Pre-dawn Friday, House members passed budget legislation, agreeing on a $300 billion increase in military and domestic spending to keep dysfunctional government running – Trump expected to sign the measure into law later today.
The shutdown lasted hours. Three weeks ago, it shut down for three days. Undemocratic Dems caved, agreeing to another continuing resolution to keep government running through February 8.
The January shutdown occurred over immigrant rights issues, notably Deferred Action for Childhood Arrivals (DACA), letting undocumented immigrants entering America as minors receive renewable deferred action from deportation, along with work permit eligibility.
Around 850,000 “Dreamers” are affected. Some estimates put their number at 1.7 million human beings deserving equitable treatment – not thrown under the bus for political reasons.
The issue remains unresolved, leaving them in limbo once budget resolution is signed into law – likely later on Friday, but in Washington, nothing is certain.
The proposed budget deal involves a fifth stopgap bill to fund government through March 23. Another measure will be needed to prevent shutdown.
It’s no way to run government, yet it persists, a game of chicken to see who blinks first.
A Final Comment
The deal agreed on includes:
• $165 billion military spending increase;
• domestic program spending boosted by $131 billion;
• nearly $90 billion in disaster relief funding:
• funding community health centers for the next two years;
• extending the Children’s Health Insurance Program for four years;
• funding for existing infrastructure programs for transportation, drinking water and broadband.
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