The wailing and hysteria in Washington is over. The politicians now have the authority to borrow more money and the bureaucrats are all back at work (rested and refreshed after their paid vacation, so they’ll probably tax, spend, and regulate with extra fervor).
So what can we say about this fight? I have five semi-random observations about what happened.
1. It was a fight worth having, even though there was virtually no chance of derailing Obamacare.
With America’s separation-of-powers system, the House of Representatives had the ability to force a fight about Obamacare, but it didn’t have a realistic shot at winning the fight. I suspect President Obama would have chosen to deliberately default if necessary to thwart Republican efforts to defund or delay the law.
That being said, I’m glad the Tea Party-oriented members chose to take a stand. They focused attention on a bad law. They forced the left to play defense. Simply stated, they were willing to take a stand against the ongoing Europeanization of the American economy. That’s something to admire, not criticize.
2. Any strategy to reduce the burden of government will have to overcome an establishment media that is philosophically biased and politically partisan.
Maybe it’s just my own naiveté, but I’m surprised that so many journalists are one-sided partisans. They don’t write stories explaining that the government shut down because Democrats rejected House-approved legislation defunding Obamacare (which accurately depicts the shutdown as being the result of a disagreement between Democrats and Republicans). Instead, they have screaming headlines about “Republicans shut down the government.”
Even more disturbing, I had several conversations with journalists explaining that the United States would not default if the debt limit wasn’t raised. The federal government, I explained, will be collecting 12 times as much revenue as required to pay interest on the debt. And I shared quotes from several establishment budget experts who agreed with my assessment. Yet those journalists inevitably wrote stories about “Republicans pushing US closer to default.”
3. The shutdown will probably be a political plus for advocates of small government.
Notwithstanding the polling data, I’m not worried about political damage because of the shutdown-debt limit fight. In the short-run, the fight sidelined the left’s agenda. Instead of debating how to expand government or how to raise taxes, we had a battle over Obamacare. That’s a good thing. And as more and more people learn about the deep flaws of the President’s main “achievement,” they will begin to appreciate in the long run that some lawmakers wanted to curtail government-run healthcare.
This won’t stop the media from talking about a “defeat” for the Tea Party, both because they’re lazy and also because they want to discourage advocates of small governments from future fights. For what it’s worth, I strongly suspect the 2014 election will generate good results for the Cruz-type lawmakers. Indeed, it’s worth noting that congressional Republicans did very well in the 1996 elections, even though conventional wisdom said they would suffer as a result of the 1995-96 shutdown fight.
4. Fans of political drama should be happy since there will quite likely be another shutdown-debt limit fight in a few months.
Yesterday’s agreement kicks the can down the road. The “discretionary” parts of the government are now funded through January 15 and the government’s new borrowing authority will last through February 7.
That almost surely means we’ll have a similar fight early next year.
5. To win that future fight, the GOP establishment and the insurgents should agree on a common strategy.
From a political perspective, Democrats had a big advantage in the recent fight because they locked arms and agreed to unanimously resist the efforts to curtail Obamacare. This meant they had to cast some tough votes in favor of the individual mandate and in favor of Obama’s special exemption for Capitol Hill. But that unified strategy put them in a stronger position than Republicans, who may have agreed on the goal of curtailing Obamacare but disagreed on the tactics of Cruz and his allies.
This is why my main advice to friends on the Hill (both from the establishment and insurgents) is to sit down over the next month or so and agree on a common strategy. If they did that, the insurgents would learn that the establishment crowd is sometimes willing to do the right thing (such as the Ryan budget) and the establishment lawmakers would learn that the insurgents are willing to push for more modest changes. I’m not sure what specifically that would mean. Maybe they’ll agree to go after Obamacare again, or some specific feature of that boondoggle law. Maybe they’ll push for overall entitlement reform. Or maybe they’ll go with my top choice, which is some sort of spending cap akin to the Swiss Debt Brake, such as Congressman Brady’s MAP Act.
If you’re interested in these topics (or if you’re a glutton for punishment), Chris Edwards and I spent almost one hour discussing all these topics in this recent Cato e-briefing.
If you want something only about half as long, I recommend my video series on the economics of government spending.
[…] his protectionism, but they did like the fact that he was a “fighter,” unlike so many (but not all) Republican politicians who get cozy with the DC establishment. They also figured he was worth […]
[…] his protectionism, but they did like the fact that he was a “fighter,” unlike so many (but not all) Republican politicians who get cozy with the DC establishment. They also figured he was worth […]
[…] like his protectionism, but they did like the fact that he was a “fighter,” unlike so many (but not all) Republican politicians who get cozy with the DC establishment. They also figured he was worth […]
[…] protectionism, but they did like the fact that he was a “fighter,” unlike so many (but not all) Republican politicians who get cozy with the DC establishment. They also figured he was worth […]
[…] Government shutdown fights may be messy, but they tend to produce a greater amount of fiscal […]
[…] restraint, we had a five-year de facto spending freeze from 2009-2014 (yes, those fights over debt limits, sequestration, and government shutdowns produced a big […]
[…] to be more accurate, what I basically discovered is that debt limit fights, sequestration, and government shutdowns were actually very effective. Indeed, the United States enjoyed a de facto spending freeze between […]
[…] to be more accurate, what I basically discovered is that debt limit fights, sequestration, and government shutdowns were actually very effective. Indeed, the United States enjoyed a de facto spending freeze between […]
[…] bottom line is that being tough on the budget isn’t just good policy. As Ronald Reagan demonstrated, there are political rewards when you shrink the burden of […]
[…] defended Ted Cruz and others who tried to kill Obamacare as part of the 2013 shutdown battle, and later explained that there was no damage for the […]
[…] spending freeze between 2009-2014. In other words, all the fights over debt limits, sequesters, and shutdowns actually yielded good […]
[…] his assessment of the shutdown fight is completely wrong. By reminding voters that Republicans were opposed to Obamacare, the GOP won a landslide victory in […]
[…] GOPers almost surely will get nothing in exchange for raising the debt limit, thus squandering an opportunity to limit profligacy in […]
[…] close to an election. And I’ll pat myself on the back for predicting – both at the start and the end of the 2013 shutdown – that there wouldn’t be any negative political […]
[…] to an election. And I’ll pat myself on the back for predicting – both at the start and the end of the 2013 shutdown – that there wouldn’t be any negative political […]
[…] Republicans were unsuccessful in defunding Obamacare, Mitchell has some interesting observations that this fight was worth having in advancing the goal of smaller government and less government […]
[…] In this video, Chris and I pontificate at greater length on fiscal policy […]
[…] these warnings had an effect. Congress eventually acquiesced. I thought it was a worthwhile fight, but not everyone […]
[…] thought it was a worthwhile fight, but not everyone […]
[…] be happy about the shutdowns, debt-limit battles, earmark fights, and […]
You left out number 6- Mitch McConnel is a traitor. the people of Kentucky need to eject this idiot. Talk about a bridge to nowhere funding! I will personally be sending contributions to his primary challenger.
[…] But allow me a bit of literary license. We just had a big debt limit battle in Washington and, after a lot of political drama, politicians kicked the can down the road. […]
[…] But allow me a bit of literary license. We just had a big debt limit battle in Washington and, after a lot of political drama, politicians kicked the can down the road. […]
[…] But allow me a bit of literary license. We just had a big debt limit battle in Washington and, after a lot of political drama, politicians kicked the can down the road. […]
The main stream media has forfeited any claim to honesty or morality. As far as the major polling companies, they’ve also forfeited any claim to ethical conduct or professionalism in design and implementation of polls.
I’m afraid forcing brief attention on a bad law and checking the full speed ahead steamroller of the Obama Administration and the Democrat Agenda is not sufficient. Attention and defense aren’t fixes, they’re delaying tactics at best. Which leads to your final comment.
You’re absolutely right that the GOP establishment that the GOP insurgents need to agree on a common strategy. The first thing is the GOP establishment needs to recognize and admit that their agenda is identical to the Democrats agenda, only with their party on top. This is a juvenile, king-of-the-hill power trip game that is directly destructive to the entire nation. The ONLY thing saving the top members of both parties from getting the same treatment Gabby Giffords received is that most of the people in this country are sane, responsible Christians who have faith (however misplaced) that SOMEONE will take the wheel and stomp on the brakes before we really do go off the cliff. The GOP insurgents, call them Small Goverment Minimalists, Constitutional Fundamentalists, or Tea Partiers, are the only ones who have solutions that haven’t been repeatedly tried and repeatedly shown to be a failure at correcting our problems.
The future prosperity and freedom of our country will not happen with the likes of John McCain, Lindsey Graham, or John Boehner, but rather with those like Rand Paul, Ted Cruz, and Michele Bachmann.
[…] recently gave five reasons why the shutdown fight was worthwhile and my number one reason was that it’s better to be on […]
Zorba,
Thanks for your comment, but be careful calling the Tea Party the “country bumpkins.” Many of us are mighty well educated, though massively demoralized by the fact that we’re outnumbered by those who:
already have a government job,
have family members with a government job,
hope their kids can get a government job,
hope they themselves can get a government job.
Just because the members of various Tea Party groups haven’t had/found the time to memorize 20 billion bits of information on how government wastes the wealth of others, don’t think that they’re not well-informed. Many of them are loading up on other skill sets, instead of reading the federal appropriations bills. Time is finite, after all.
The Tea Party is pretty heterogeneous. You have the “These Colors Don’t Run” bumper sticker set, and the “Austrian Economics” set.
Respectfully,
Ann Greenleaf
[…] Dan Mitchell (CATO Institute): Five Takeaways from Government Fight […]
polls indicate that that Americans are very displeased with the performance of both the democrat and republican parties… and would accept a third political party… this led our regional pbs affiliate to invite the chairman of the state libertarian party to comment on national events on our local news cast… he was timid… respectful… and lacked charisma… his segment was immediately followed by an academic who said… [in effect] that it was impossible to have a third political party in the u.s… and anyway… libertarians were just too creepy to get elected…
for the time being… this leaves us with the tea party/libertarian insurgency within the republican party to act as the loyal opposition for both disaffected democrats and republicans… and show the flag for independents as well… can they do it? time will tell… but each event they participate in adds to their experience in participating in the political process… they gain valuable knowledge of the personalities and procedures… the shutdown was a dress rehearsal… expect high drama for the next election cycle… if we can not stem to tide of unconstitutional governance in the next two election cycles… we’re______…
“Critics call for ‘de-Americanized’ world after US fiscal debacle”
http://america.aljazeera.com/articles/2013/10/17/shutdown-lessonsfromabroad.html
ObamaCare is a huge redistribution engine for the delusional masses who dream of an American standard of living (in the world’s top ten percent) without a matching exceptional productivity of their own to exchange said standard of living electoral mandate.
Think for a minute what is ObamaCare? Details aside, what is its central tenet?
Its central principle is that families who make, roughly speaking, more than 90k per year, are obligated to pay the healthcare costs of those making less than said threshold. Whether that money comes out of their paychecks, excise taxes, or the companies they work for is irrelevant. It is money embodying their daily efforts as they leave their families in the morning to go work half their day for distant others. The government has no money or resources of its own. Every penny it spends, i.e. every service it provides, someone else has to offer either directly or indirectly through his or her work effort. As much as voter-lemmings keep balloting against this economic incarnation of energy conservation laws, the principles of the material universe refuse to change.
So, to run a few simple numbers, those making over 90k are a quarter of the population. And average annual medical costs for a family are around 15k. In broad terms, that means that every entity making over 90k will eventually be called upon to support three making less than 90k — to the tune of 15k per year. That is 45k per year in redistribution for those making over 90k !!! Do you think that after this redistribution is applied, Americans will still have the strongest incentives in the world to go work and outcompete the seven billion of this planet? So while not fully rationalized, the instincts of Tea Party country bumpkins are correct: America’s decline is sealed. Enjoy the momentum of glories past while it lasts, stop being distracted with red herring budget details, and start preparing a long term escape boat.
Sure, not everyone is in the exchanges yet, so the redistribution engine is just starting. And the 90k limits, figures and details may yet change — and predictably become a source of eternal political and electoral, and thus base productivity energy squander. But the core, the basic philosophical tenet of the new American public mentality has been irreversibly cast: “Our effort-reward curves will become the same as France, and we regard that, on balance, as a positive thing”.
I am sure that even a majority of liberals have at least considered these drawbacks. But they believe that the benefits outweigh the negatives because they do not understand the pernicious, relentless and permanently compounding effect of lower growth rates, or choose to commit to long term decline for short term gain and just hope that it just won’t be that bad. But it will be increasingly bad, and there will be no bottom, as sub-par growth rates (the world is growing at 4-5% so anything below that IS subpar) compound you into an ever deeper endless decline.
So, to return to more immediate matters, because ObamaCare is such a huge redistribution bonanza for the masses, initial glitches will be ironed out, or ultimately ignored, dwarfed by the redistribution jackpot, and all voices opposing it will get tired of fighting in vain. The tactical choice to try to kill ObamaCare before it grows, based on glitches and details is likely doomed to fail. Why? Because the instincts of the progressives on the other side are also correct: ObamaCare *IS* a huge redistribution bonanza. At least until relentlessly compounding permanent subpar growth rates compound you into systemic decline. Until the masses tap into the redistribution and new generations reorient their lives realizing that “with so much unconditionally guaranteed, and exceptionalism so heavily taxed, there is little reason to live a more stressful youth looking for exceptional success – especially when you inescapably have seven billion souls to compete with”.
The typical Tea Party member’s layman instinct is correct: 2008 WAS the endgame of American prosperity. It demarcated the point of no return. The point where increasing voter desperation leads to ever more and compounding bad choices. Although most Tea Party members do not understand the details — their opposition being based primarily on ethical principle and instinct rather than utilitarian understanding of the terminal decline destiny inherent in low growth rates.
If you had asked many common people in the previous century why they thought communism was bad, they would have told you in practical everyday terms that: “people just won’t work for distant others”. But how could their country bumpkin simplicity stand up to towering intellectual geniuses like Lenin, Marx, Engels, and the scores of useful idiot western intellectuals – who, ridiculing common wisdom, wrote many one pages of equations proving that prosperity can be had, based on flatter effort-reward curves and the satisfaction of belonging — and arduously working for — a bee like hippie colony. But the country bumpkins were right. And their central observation, lack of individual motivation, was the core reality of socialist (un)productivity. So is the Tea Party today. But to hope that America will be the serendipitous one – the one that breaks through and emerges out if this new wave of hope in coercive collectivism — seems rather delusional to me. America caught the disease late, and the pendulum is still swinging in the direction of decline. There is a heck of a lot of suffering folks on the long road to decline ahead, before the dreams of HopNChange are finally regurgitated by once hopeful citizens who the reality of decline finally pounds into submission and they eventually give up. Just look at history. France has not given up yet. Greeks have not given up yet. The pain level is not quite there yet. Look how far into decline, destruction and despair the majorities who believed in the various incarnations of coercive collectivism had to fall before they gave up their dreams of effortless prosperity through the ballot box.
Think, and ponder… where is the American pendulum now? Wheeeee….
Ponder and start teaching your children how to be mobile. Or bitterly regret not heeding the practical part of Zorba’s advice in a couple of decades…