5 Predictions About the Federal Government Shutdown

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Day Two of the 2013 Government Shutdown has passed, and there’s still no deal. Speculation is flying that Speaker Boehner is struggling to hold his party together, and that this could be the incident that permanently fractures the GOP. But while the fervor of my political friends’ (on both sides) Facebook newsfeeds has been off the charts this week, I can’t help but notice, as a DC resident, how little my life has been impacted by two days without a fully-operational government. That’s not to say that people aren’t worse off than they were on Monday—many certainly are. The choices that have been made between which departments have been closed and which are still operating betray the government’s real priorities; that is, arresting drug addicts > feeding children and pregnant women. But the situation is this: the media is making a huge deal about the first government shutdown in 18 years, and I’m still getting junk mail delivered. If you’re in the demographic that spends your days at the office reading Internet news, then just move along, there’s nothing to see here.

Some predictions about the outcome and aftermath of this circus:

(#1)  The furloughed federal workers will get paid eventually. Nobody wants to go into 2014 being the guy that caused their janitor to lose his house or miss his wife’s chemotherapy treatments. 1-2 weeks’ pay for 800,000 workers is maybe a couple of billion, tops? In a budget of 3.5 trillion? It’s a rounding error, and they’re going to get their money.

Is a Grand Bargain in the works? “Sources” tell Robert Costa yes; the debt ceiling deadline is fast approaching, and assuming the GOP doesn’t fracture magnificently, (#2) a new Paul Ryan Budget will be in the cards as the CR negotiations roll headlong into a debt ceiling showdown. Hey girl, don’t worry about it. (On a related note, Costa did an informative Reddit AMA yesterday on the negotiations behind the continuing resolution.)

The press may be pissed off at Republicans and especially Boehner now (I was last week), but (#3) by 2014, and certainly 2016, only The New York Times editorial board will remember that some federal workers got their paychecks a couple of weeks late. (NB: Hey look, the stock market doesn’t care about the shutdown at this point, either.)

(4) Obamacare stays, with some minor tweaks. None but the most ideologically-faithful will actually like it, but not enough people will hate it enough to demand change. Blame risk-aversion among the general population, “the devil you know,” and all that. Undoubtedly, special tweaks to the law will lookout for the legions of baby boomers, who have – let’s be real – already destroyed the future with their abysmal savings rates and insistence that their kids attend (debt-finance) “the best school you can get into.” (NB: Baby boomers basically suck.) Beyond that, most of us are fortunate enough to only come in contact with the health care system once in a while. We all hate the post office and the DMV too, but we’ve accepted them as unpleasant facts of life.

(5) The Tea Party – or the White Rural Party of Declining Economic Relevance – will not “take over” the government. Or the Republican Party. Gerrymandering may have gone in their favor this decade, but the politics of One-Man-One-Woman and White Rural America are facing some inhospitable demographic trends in the long-run. So get ready for a 2016 presidential primary slate full of more ridiculous, unelectable GOP candidates.

The lesson learned from all of this? Political gains can be won at the expense of pissing off just a few hundred thousand people. If the Democrats want to pass a base-appeasing, symbolic but ineffective revenue measure, or if the GOP needs to make a compromise, all they have to do is pass some sort of “Millionaire’s Tax.” Do you know how many Americans earn incomes of $1 million or greater? (Hint: It’s a lot fewer than 800,000). You could in theory pass a modest wealth tax on households with more than $20M, you’d just have to deal with the outrage of 66,000 people. (Of course, there’s always the chance that they’ll go Galt faster than you can say “fair share,” but maybe Warren Buffett* can convince them to play along).

Write this one down and commit it to memory, because it’s the most important: Nobody in the mainstream media will ever question the significance of nearly a million federal workers being labeled “non-essential.”

*Just kidding! Buffett has called for a higher income tax on super-high incomes, but even he’d set Washington on fire if you tried to tax his overall wealth.

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