10.01.2013 0

Threat of Government Shutdown saved America $300 billion this year

Obama government shutdownBy Rick Manning

It is fashionable to put up web headlines that boldly proclaim that the budget fight could derail the economic recovery, or even send the international economy into a downward spiral not seen since 1929.

To put it as gently as possible, what a bunch of hooey.

Economic analysts who in one breath admit that Obamacare is killing job creation are now supposed to be worried that a short term fight to delay the job killing law would have a negative impact.

I guess these are the same geniuses who were over the moon concerned with the dramatic expansion of government borrowing, but found the short battles that no one even remembers, to lower government spending to be economically debilitating.

If I were a stock analyst for a health care company that is one of the Obamacare winners, I would encourage headlines predicting doom over the attempt by House Republicans to stop or delay the implementation of the law.  But if you are truly trying to help brighten the outlook for the U.S. economy, you would be wise to root for the delay of Obamacare implementation for a year, as it will also stop the onslaught of job losses, increased insurance costs and the shifting of hourly employees to part time status.  All of which are devastating to the economy and to the lives of the average American.

The so-called government shutdown is actually more like a slowdown, as only a relatively small percentage of federal government employees are considered non-essential employees for budgetary purposes.  Of course, when a snow storm is predicted for DC, and non-essential employees are allowed to stay home without using their leave time, the streets could have tumbleweeds rolling down them, they are so deserted.

It is understandable that headline writers and those desperate for clicks on their websites would issue dire predictions about the impact of any government shutdown or fiscal cliff or debt ceiling battle, but it is nothing more than theatrics.

If not for battles over the budget deficit, the sequester that has reduced government spending narrowing the budget deficit would not have happened.

If not for battles over funding the government and all the brinksmanship entailed, the projected federal deficit for this past year would not have been cut in half since 2010 when Republicans gained the majority in the House.

The good news is that there is finally someone in a position of power who is at least marginally willing to fight to limit government spending against a president who has never seen a budget he doesn’t want to bust.

Just consider that the Congressional Budget Office’s analysis of Obama’s 2011 budget estimated that if left unchecked the federal government would have spent $3.842 trillion in the 2013 fiscal year.  It is estimated that the government actually will have spent less than $3.5 trillion instead.

While some of this savings is due to other factors, the budget battles that have many Americans asking why people in D.C. just can’t get along have successfully resulted in around $300 billion in savings in the past year alone from what Obama had projected to spend.

But putting a brake on government spending and entitlement cost increases only occurs when government shutdowns and debt ceilings are approaching because these are the only two must-pass bills that Washington works on.

So put the media hyperbole aside and realize that just this year, America has been spared around $300 billion in additional debt due to those who are willing to fight.

Viewing the current battle over Obamacare funding through this lens, it is easy to see that while there is short term disruption if the federal government is shut down for the 18th time since Ronald Reagan was president (including once because Democrat Speaker Tip O’Neill wanted to force Reagan to accept reauthorization of the Fairness Doctrine), the long-term benefit of reigning this massive new entitlement program is enormous.

The definition of leadership is fighting battles today that have lasting implications.  No battle could be more important than the fight to stop Obamacare implementation, even if it is only for a year.  And yes, it is worth the relatively minor inconvenience of a federal government shutdown to get it done.

Rick Manning is Vice President of Public Policy and Communications for Americans for Limited Government.

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