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The Shutdown Shows Us How Unreliable and Harmful Government Can Really Be

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01/26/2019

As the partial government shutdown has continued to its record-breaking length, more and more people have found themselves discomfited, inconvenienced or harmed in some way by the consequences. That has led to a rising chorus of complaints against our current form of gridlock. With it has come an interesting form of optimism from the political left—the hope that the problems due to the shutdown will convince people just how valuable the government is to each of us, which will move people toward their side of the political aisle.

This is illustrated by a recent Daily 202 article by James Hohmann and Joanie Greve in the Washington Post. They write that “the effects are poised to become both worse and more obvious to more people. One enduring result could be that Americans collectively come to appreciate the value government provides in their everyday lives to a greater degree.” They then contrast the resulting “teachable moment on what exactly the government does and how important it is to people’s lives,” to Ronald Reagan’s statement that rather than providing solutions to problems, “Government is the problem.”

They document some of the problems due to the government shutdown. However, long wait times at airport security, problems providing food stamps, difficulties with affordable housing contracts expirations, meeting payrolls, etc., etc., do not disprove that “government is the problem.”

To illustrate this, remember that there are many things the government does that it has no business doing. Say one of them was creating a bureaucracy that had the power to decide on issuing “free speech” permits, which they sold to those approved to speak on particular public issues (you might think that could never happen, especially given the First Amendment, but it is not so different from the effects of the fairness doctrine for broadcast radio before the Reagan administration eliminated it) or that administered the civil asset forfeiture abuses of their citizens. Neither advances our general welfare. Neither comports with the logic or core documents of America’s founding. Yet people would adapt to the rules they were faced with, and their expectations would come to incorporate them. If at that point, a government shutdown shut off funding to those bureaucracies, those disappointed expectations would cause people difficulties. Complaints on that score, however, do not demonstrate that such government functions will be considered more valuable than before as a result.

Crowding Out the Private Sector

Similar logic applies to functions that would have been (and have in the past been) provided by the private sector (e.g., education and services offered by private insurers and friendly societies), but have largely been crowded out by government because of its special treatment (e.g., exemption from property taxes) coercive power (e.g., the powers of regulation and eminent domain) and access to taxpayers’ pockets for financing. In such areas, government bureaucrats who know your circumstances and preferences less well than you do, care about you less than you do, and are operating without the constraint of having to cover their bills through voluntary transactions, will predictably serve you worse, and at a higher cost, than what they crowded out. And the only away around this relies on government theft from others, which cannot meet any credible evaluation as providing “liberty and justice for all.” Just as above, if a government shutdown further eroded how well “public servants” served Americans, ensuing complaints do not demonstrate that such government functions will be considered more valuable than before as a result.

In addition, whether we are considering what the government shouldn’t do, what it has crowded out others from doing, or even what some think it should do, the shutdown stresses teach a much more powerful lesson than about the value of government services. It teaches Americans that the government cannot be counted on to deliver on its promises, however valuable it might be if such reliance was justified. After all, during the partial government shutdown, all the problems that have resulted involve government failing to deliver on promises it has made. Further, we can have no assurance that it will not happen again, or be even worse, in the future. Especially when that unreliability is added to all the government programs with unfunded liabilities that not only dwarf the official public debt, but by so much they cannot be delivered on—the cornucopia of Social Security, Medicare, Medicaid, veteran’s pensions, state government pension programs, etc.— the better people will recognize how trustworthy government commitments really are, and the less they will rely on them or be manipulated by words that are far cheaper than making good on them.

Gary M. Galles is a professor of economics at Pepperdine University. He is the author of The Apostle of Peace: The Radical Mind of Leonard Read.

 

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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