U.S. Government Shutdown- the Last Gasp of the Reagan-Friedman Agenda?

The shutdown of the U.S. government is an outrageous act of ignorance, foolishness, and vindictiveness. History suggests that choosing destruction is usually tragic, but it’s hard to believe the Republican hardliners have any sense of history.

The anti-government agenda in the U.S. has had many contributors. The end of the progressive uses of government more or less began in the 1970s, and was given impetus by Ronald Reagan’s scapegoating of government. It was also given impetus by Chicago-style economics, led by Milton Friedman. His book Capitalism and Freedom is basically a political pamphlet calling for governance to be reduced to a function of the Invisible Hand. Many Democratic economists came under his sway.

Shutting down the government now is just a variation on Reagan and Friedman’s “starve the beast” strategy of undermining government by denying it funding.

Friedman and Reagan have now reached the height of their influence, but many joined this march of foolishness. President Obama has consistently paid deference to the party line that reducing the federal deficit is the main economic priority. The Bowles-Simpson fiscal commission captured the self-destructive America temperament of the time by insisting federal revenues not rise above 21 percent of GDP. When Reinhart-Rogoff’s 90 percent bright line of debt-to-GDP was shown to be an artifact of poor research and arithmetic, Erskine Bowles said it was still just common sense.

Lots of moderate Republicans have made budget-cutting their main domestic priority, as have many Democrats. Sequestration is undermining what could have been a strong recovery by now.

The media, in their embrace of the safe middle-way, have done their share to promote general antagonism against government as well. It’s an American journalistic tragedy.

And so here we are. Just enough people feel government is meaningless to allow this crazy betrayal of a democratic nation to occur. How else can you so despise Obamacare that you would go to such destructive lengths? It is a useful program designed to help some 32 million Americans who suffer—yes, suffer—without health insurance.

*Read the full article here.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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