The shutdown that many were sure could not happen has occurred. With around 800,000 federal workers furloughed and many more required to continue working for no pay, the government, both the Republican-controlled House and the Democratic president and Senate have failed the United States by not acting to resolve this issue.
If this current impasse is an omen for things to come, it will only get worse. This is not only because of poor politicking by our representatives, but also to a dangerous game of political showmanship. Freezing economic recovery by holding this country hostage in a shutdown has become a national showcase of Washington’s dysfunction, with little to gain for either party. We should expect — and demand — better government from our elected officials.
For many, the federal shutdown doesn’t have a direct effect on their lives. Even nationwide, experts say that a short shutdown is unlikely to have a serious effect on the economy. According to economists from Morgan Stanley and Goldman Sachs, the current furlough of nonessential federal workers is likely to reduce the GDP by around .15-.2 percentage points each week, and, assuming the workers get back pay, that minor decrease is likely to bounce back.
But the federal shutdown is only a minor spot of trouble when compared to the problem of the debt ceiling, which will need to be resolved in only a couple of weeks.
With Oct. 17th — the date when the Treasury expects the government to reach its current debt ceiling — looming, we will only have $30 billion on hand, with only small amounts of any more expected income. Whether on that date or shortly afterwards, it is expected that the United States Federal Government will be forced to default on its loans due to lack of funds and inability to pay.
In 2011, the government flirted with the debt ceiling, passing a stopgap measure to punt the responsibility forward, and even that close brush with default had clear effects. The rating agency Standard & Poor’s downgraded the credit rating from AAA to an AA-, and that moment set the recovery back and that the higher lending rates have cost the country billions of dollars, even before the country ever defaulted on its debts.
Recently, another of the main credit rating agencies, Fitch Ratings, stated that they would consider lowering the credit rating of the U.S. if the debt ceiling is not dealt with in a “timely manner.”
Though Rep. John Boehner (R-OH) has made statements that he will not allow the country to default on its debt, other House Republicans seem more willing for political brinkmanship. Rep. Darrell Issa (R, Cali.) said that “the debt ceiling and every appropriations bill” is an opportunity to work on how to cut waste in government, and though Democrats have argued that they would be willing to have negotiations on the Affordable Care Act after the shutdown has been solved and the debt ceiling has been raised, he doesn’t believe them.
This is the place and opportunity to have these discussions and hash out the differences. And though some would love to pin the perilous fate of our economy on House Republicans, Rep. Darrell Issa has a point. President Barack Obama has been called too willing to negotiate at times, but many of those negotiations were hardly worth calling negotiations.
For any elected official in our government, doubting the veracity of the willingness of the opposite party to negotiate is not paranoia, but a learned habit. All politicians need to look at the dangerous effects of what this political gridlock might have and be willing to lose a little face in order to compromise and save this country a great deal of turmoil and heartache.
Government must band together to avert crisis
October 6, 2013
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