If President Trump holds firm on
the shutdown until January 20, 2021, he will have struck the greatest blow for
liberty and against bureaucracy in American political history.
To achieve this, all that he has
to do is nothing.
In doing this, he will have
overturned a classic slogan of American politics: "You can't beat
something with nothing."
DON'T DO SOMETHING. SIT THERE
Trump is exercising his
legitimate constitutional right to do nothing. All he has to do is do nothing
until January 20, 2021.
These days, Congress does not get
around to passing a real budget. It just keeps passing budget extensions that
last a couple of months. There is not enough agreement in Congress to produce
an annual budget any longer. Gridlock is here.
These extensions are called
continuing resolutions. They are now permanent. Wikipedia reports:
Between fiscal year 1977 and
fiscal year 2015, Congress only passed all twelve regular appropriations bills
on time in four years - fiscal years 1977, 1989, 1995, and 1997.
Between
1980 and 2013, there were eight government shutdowns in the United States. Most
of these shutdowns revolved around budget issues including fights over the debt
ceiling and led to the furlough of certain 'non-essential' personnel. The
majority of these fights lasted 1–2 days with a few exceptions lasting more
than a week.
The article provides a list of
these continuing resolutions since 2001. It goes on for pages.
Congress will to have to agree on
a budget extension in order to put a bill on Trump's desk. This is highly
unlikely today. The government has entered gridlock. This will not change for
two years. If, somehow, it passes a continuing resolution, he will have the
option of vetoing that bill. If he vetoes it, it will take a two-thirds vote of
both houses of Congress to override his veto. The House may do this, but the
Senate probably will not do it, at least not the first time he vetoes a bill.
So, all that Trump has to do is nothing. It is legal. It is constitutional. It
may be bad politics, but it is good economics. It is good for liberty. The
longer the shutdown goes on, the more that the federal government will be
disrupted. That surely would be good for liberty.
The Democrats in Congress are not
going to budge on their refusal to fund Trump's wall. My assumption is that he
will back down. But he is going to delay this as long as he can, emotionally
speaking. Pressures will be brought on him from Republicans, especially in the
Senate, to back down. The political consequences of shutting down parts of the
government would probably be catastrophic for the Republicans in 2020. The
Federal Reserve's engineered recession will hit, and the Keynesian media will
blame the shutdown. But he seems not to care for now.
A PAIN-FREE SHUTDOWN, SO FAR
The partial shutdown of the
federal government began on December 22. Have you noticed any difference in
your life? I notice no difference whatsoever in mine. Only if you are a government
employee are you feeling any pain.
A small fraction of the
government has actually been shut down. There are 800,000 civilian employees on
unpaid leave, but most of them are still coming to work. There are about two million civilian employees of the U.S. government.
The FBI, the CIA, and the
intelligence agencies are still on duty and being paid.
Employees of the TSA have been
furloughed. But most of them are coming to work on the assumption that they
will eventually receive their presently frozen salaries. About 50,000 IRS
agents have been called back to work at no pay. In short, the federal
government is treating its workers like dirt. It is making promises to these
workers that may not be able to be fulfilled for months. "Trust us!"
It all depends on how long Trump and the Democrats decide to play chicken with
each other.
If it goes on for several months,
tens of thousands of these workers are going to take other employment offers.
They will not have any choice in the matter. They have to pay the bills.
They're going to get jobs that do not pay anywhere near as much money as the
federal government pays. They're going to have to re-enter productive society.
I am reminded of the scene in Ghostbusters where the main
characters are fired from the university. Harold Ramis' character is
unconcerned. Their scientific work will go on! Dan Ackroyd's character is
worried.
Personally, I liked the
university. They gave us money and facilities. We didn't have to produce
anything! You've never been out of college. You don't know what it's like out
there. I've worked in the private sector. They expect results.
The great threat to the federal
government today, which includes Congress, is the threat that the American
public will not notice any significant disruption of their lives because of the
furlough of 800,000 workers. The disruptions lie ahead. With respect to the
furloughs of the employees of the Internal Revenue Service, there could be
serious disruptions of the government's plans if these people don't come back
to work within the next four months. It will disrupt the collection of taxes.
This would not be as great a
threat as it is, had the government ever been able to revamp its computer
system. But that modernization program has been going on for at least 25 years,
and it has not led to any significant improvement of the IRS computer system,
which is left over from the 1960's. This is one of my favorite headlines of all
time. It is from 1997. IRS admits its $4 billion modernizing is a failure. Official
says computers don't work; agency wants to contract out tax returns.
The longer that the shutdown goes
on, the more unpopular Trump will get. That is not my concern. Not discussed by
the mainstream media and most of the other media outlets is the fact that most
Americans will not notice that these people are not working any longer.
Some of them ought to be out of work. Their departments ought to be shut down.
We don't know how many departments there are in the federal government. There
has never been a detailed survey of how many departments there are, and how
many employees are in each department. The government is not interested in
releasing that particular statistic.
ROTHBARD ON GOVERNMENT STATISTICS
The government collects
statistics. It collects all kinds of statistics. It collects them by using
taxpayers' money. It forces Americans to reveal this information, under penalty
of fines or even arrest. It collects information on all those aspects of
American life that the government wants to control or might want to control in
the future. But it does not collect statistics on those aspects of the federal
bureaucracy that some rogue Congressmen might use to embarrass a particular
agency. Example: the budgets of the CIA and NSA.
Back in 1961, a then-unknown
economist named Murray Rothbard wrote an article for the Foundation for Economic
Education (FEE). It was published in an annual collection that FEE
released: Essays in Liberty. Its title: "Statistics: Achilles'
Heel of Government." It is posted here. It was one of the finest articles Rothbard
ever wrote. It was important for two reasons. First, it attacked an area of
government expenditure that was almost universally accepted as legitimate in
1961. (Sadly, it is equally accepted today.) He was making a point: sometimes
things the government does that seem to be beneficial are in fact threats to
liberty. Second, he made the point that the statistics are used for the
purposes of government control. He wrote: "Statistics are the eyes and
ears of the bureaucrat, the politician, the socialistic reformer. Only by
statistics can they know, or at least have any idea about, what is going on in
the economy."
Certainly, only by statistics,
can the federal government make even a fitful attempt to plan, regulate,
control, or reform various industries — or impose central planning and
socialization on the entire economic system. If the government received no
railroad statistics, for example, how in the world could it even start to
regulate railroad rates, finances, and other affairs? How could the government
impose price controls if it didn't even know what goods have been sold on the
market, and what prices were prevailing? Statistics, to repeat, are the eyes
and ears of the interventionists: of the intellectual reformer, the politician,
and the government bureaucrat. Cut off those eyes and ears, destroy those
crucial guidelines to knowledge, and the whole threat of government
intervention is almost completely eliminated.
Third, the government's
statistics provide an illusion: the illusion that the government can rationally
and scientifically plan the general economy, or intervene into the economy to
make things better for the average citizen. If the government did not have
access to comprehensive statistics beyond what private industry collects, and
which private industry can legally refuse to supply to the government as a
matter of property rights, the government could not use the argument that it
has the superior knowledge necessary for directing an entire industry or the entire
economy. This would remove an extremely important reason for the public to
believe in the legitimacy of government economic planning.
It is true, of course, that even
deprived of all statistical knowledge of the nation’s affairs, the government
could still try to intervene, to tax and subsidize, to regulate and control. It
could try to subsidize the aged even without having the slightest idea of how
many aged there are and where they are located; it could try to regulate an
industry without even knowing how many firms there are or any other basic facts
of the industry; it could try to regulate the business cycle without even
knowing whether prices or business activity are going up or down. It could try,
but it would not get very far. The utter chaos would be too patent and too
evident even for the bureaucracy, and certainly for the citizens. And this is
especially true since one of the major reasons put forth for government
intervention is that it “corrects” the market, and makes the market and the economy
more rational. Obviously, if the government were deprived of all knowledge
whatever of economic affairs, there could not even be a pretense of rationality
in government intervention.
Rothbard concluded his article
with these words:
Thus, in all the host of measures
that have been proposed over the years to check and limit government or to
repeal its interventions, the simple and unspectacular abolition of government
statistics would probably be the most thorough and most effective. Statistics,
so vital to statism, its namesake, is also the State's Achilles' heel.
This is a strong statement. I
don't think any libertarian or conservative would have made this argument prior
to Rothbard's article. With the magnitude of the total government being so
great, and the money allocated to gather statistics so minimal, and the
intrusion of the government seeming so be minimal, no conservative or
libertarian would have argued that this really is the Achilles' heel of
government. Achilles' heel was his only vulnerable spot. Over the decades, I
have come to appreciate his argument. I have written about this before. You can
read my article here: https://www.garynorth.com/public/17257.cfm.
THE SHUTDOWN
How large a chunk of the federal
budget are we talking about? Wikipedia reports:
As of fiscal year 2013 (FY13),
the 13 principal statistical agencies have statistical activities as their core
mission and conduct much of the government’s statistical work. A further 89
federal agencies were appropriated at least $500,000 of statistical work in
FY11, FY12, or FY13 in conjunction with their primary missions. All together,
the total budget allocated to the Federal Statistical System is estimated to be
$6.7 billion for FY13.
In terms of the federal budget of
$4.4 trillion, $6.7 billion is chump change -- a statistical rounding error.
Yet if the government ceased collecting all of this information, that would
cripple the government more per dollar cut than any other budget reduction.
Other agencies would undoubtedly absorb most of the employees in these 102
agencies, but if that funding was not permitted by the government, the
government really would begin to unravel. It would no longer be able to tell
the public plausibly that it had the power to regulate the economy.
MarketWatch lists the dozens of
economic reports that are published every week or month. I'm sure this is not a
complete list, but it is extensive. It notes the reports that may be delayed because of the shutdown.
There are about 10 of them. I'm sure there are others that will not be
released. In terms of the overall collection of statistical data, these reports
are marginal. But I will take what I can get. That is to say, I will rejoice in
what I cannot get.
CONCLUSION
The statistics-gathering agencies
are easy targets for cutbacks. The voters will not miss them. Meanwhile, nobody
in Washington understands the centrality of statistics collection today. It is
not economically relevant. But it is highly relevant with respect to producing
the fig leaf that provides the illusion of scientific central planning. The
sooner that this illusion comes to an end, the better for liberty.
