Republican Shutdown Shuts Down The Economy — So Do The Cuts They Demand

Some even estimate a shutdown could trigger a second-dip recession. In Prolonged Government Shutdown Could Wither Confidence And Even Trigger Recession, a HuffPo report warns,

An extended federal government shutdown could devastate the U.S. economy by dealing a blow to Americans’ confidence, experts said Tuesday.

Already, Americans face a host of economic woes. The unemployment rate remains high. Home prices are still falling, aggravating a widespread foreclosure crisis. Oil prices are rising, pushing transportation costs steadily higher and tearing precious resources from the economy.

In this context, a prolonged federal shutdown would drain Americans’ confidence in their government, hobbling spending, borrowing and investment — and pushing the economy toward recession, said Mark Zandi, chief economist of Moody’s Analytics.

Here are just a few examples of areas where the economy would be affected:

Government Contractors- businesses that rely on government contracts for survival would see their cash flow dry up after even a week of shutdown as payment processing ceases.

Tourism – many areas around national parks depend on tourism dollars for their livlihood. This would dry up immediately.

Food Safety – as government inspections of meat and other food products cease, deliveries to supermarkets would stop.

The Rest Of What Government Does — courts, ports, infrastructure, investment, housing guarantees, regulation enforcement and the rest of what government does helps keep our our economy operating.

If They Get What They Want

If they get what they want and gut the government, our economy will take a huge hit.

Last month, in Budget Cut Job Losses Will Undo 2010 Job Growth, I referred to Goldman Sachs, Moodys and other estimates of the job losses that budget cuts would bring, and pointed out this would undo the job growth we saw last year,

So will these cuts cost 200,000, 700,000 or a cool million jobs? Either way it is the wrong direction. This chart shows last year’s private sector job growth. 1.3 million total — not even enough to keep up with the new people entering the labor pool. Congress and the administration are discussing whether to knock 200,000, 700,000 or a cool million off of that, instead of how to create new jobs and grow the economy.

Remember How We Got Here

The budget deficit is the result of tax cuts for the rich and increases in military spending. We just extended the tax cuts for the rich, and there are no proposals to cut military spending in the pre-shutdown negotiations. The discussions are only about how much to hurt regular people, while protecting the wealthy and Wall Street.

Now the Republican budget proposals give more tax cuts to the rich and continue to extreme, massive, astonishing, incredible, huge, stratospheric level of military spending — more than all other countries combined.

We should be discussing tax increases on the wealthy, cuts in the bloated military budget, a “Medicare-For-All” health care plan that takes care of people and removes the burden from businesses and investment in jobs, infrastructure, education and R&D to grow our economy.

The ideology of a few billionaires who have the ability to convince people government shouldn’t stop them from fleecing us has spread so far that people have lost sight of basic sense. Many people have become convinced that government is in our way, just because these billionaires have been running a propaganda campaign trying to get it out of their way. Nothing could be further from the truth, and we are about to find out the hard way.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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