Doug Casey on the Government Shutdown

Via Casey Research

Justin’s note: The U.S. government is shut down.

It has been for 28 days now – making it the longest government shutdown in U.S. history by a wide margin. And there’s no telling when it will come to an end.

So it shouldn’t come as a surprise that the media’s having a field day with this. But I can’t help but wonder if this is as big of a deal as people are making it out to be. So I got Doug Casey on the phone to see what he thinks…

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Justin: Doug, the U.S. government shutdown is now 28 days old. Are you surprised it’s lasted this long?

Doug: I’m not surprised, but I’m definitely pleased. There have been a number of shutdowns in the past. Sixteen days under Obama. Twenty-one days under Bill Clinton. Five separate shutdowns on Jimmy Carter’s watch. This one, like its antecedents, is no more than a tempest in a toilet bowl – just a nuisance for a small segment of the population. A proper shutdown would include the IRS [laughs].

In this case, the shutdown is because Trump isn’t getting the $5.7 billion he wants for his wall. But this begs the question… should there even be a wall? My answer is “no,” for a number of both practical and philosophical reasons. Keeping illegal aliens out is a good idea. But it would happen naturally if just two things were done.

Point number one, get rid of the welfare benefits that draw the wrong kind of people. During the 19^th century, and up to the 1930s, there were absolutely no welfare benefits for immigrants – or anybody else, for that matter. As a result, you attracted opportunity seekers.

Point number two, all U.S. property should be privately owned. Including streets, sidewalks, and parks. That way if they can’t support themselves, or make an arrangement with somebody who will, they would simply have no place to sleep.

No welfare?! No unowned property where vagrants can loiter?! It sounds heartless. But I have no doubt that people like Congresswoman Ocasio-Cortez, New York’s Mayor DeBlasio, and thousands of other generous public servants would feed, clothe, and shelter them at their own expense.

But in today’s world, the public doesn’t want less government. They want much, much more. Polls show most Millennials favor socialism. So we can look forward to a paradise for the workers and peasants in the new future.

However I’m afraid nobody is looking at the important thing here.

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Justin: And what would that be?

Doug: Some rather basic principles. Our topic is not why this shutdown occurred. It’s whether or not the shutdown is a good thing or a bad thing. To answer that question we have to decide to what extent the federal government is necessary. Everybody assumes that it’s always been there, and has always been the behemoth it now is. The average American not only confuses the government with the country – they’re actually two different things – but sees Washington, DC as a fixture in the cosmic firmament.

Let me make what some may feel is an outrageous statement: There’s nothing the government does that couldn’t and wouldn’t be done – vastly cheaper and better – by profit-seeking entrepreneurs. Further, a large part of what the government does is not just unnecessary, but destructive. And wouldn’t be done at all in a free market.

So, let’s look at a few departments that have been affected by this shutdown, and see how important they are to the conduct of life in the United States. Obviously this isn’t even scratching the surface. A proper discussion would take years. But it’s worth taking a few minutes here because the average American – forget about the average European – hasn’t even considered the concept.

My view is optimistic and hopeful. Basically, all the departments that have been shut down should actually be abolished wholesale. They serve no useful purpose. If they are useful, they should be privatized.

The National Aeronautics and Space Administration [NASA] is an excellent example of this. Right now, 95% of its employees have been furloughed.

And I’m all for NASA in principle, or at least what it does. I’m a big fan of space exploration. But even though NASA is full of competent, high-IQ people, it’s run like the post office, or a DMV, or the military. It’s degenerated into a typical cost-plus government bureaucracy.

SpaceX, Blue Origin, and many other companies are proving that the private sector can do anything that NASA does – faster, cheaper, and better. Why? Because they’re not constrained by politics. They necessarily have to operate in a sustainable, efficient, innovative way. Because they’re doing it for profit. Which means they’re trying to create capital, not consume it.

Apart from that, the U.S. government is manifestly bankrupt. Soon enough, it won’t even be able to pay the interest on its debt, forget about science projects. That’s going to happen over the next couple of decades. NASA will be left high and dry – last in line for whatever funds there are.

NASA, and similar government enterprises, should be privatized. Either taken public in an IPO, perhaps with most shares distributed to all U.S. citizens, and its employees. Or sold to some company with an interest in space. That would turn it from a cash consuming liability into an asset.

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Justin: What federal agencies would be better if taken over by the private sector?

Doug: The United States Department of Agriculture [USDA]. It has about 100,000 employees and spends about $140 billion a year. Those are amazing numbers, considering that only 1 to 2% of the U.S. population works in agriculture. Its useful functions – crop reporting, bio research and such – should be privatized. Of course all crop subsidies, price controls, planting limits, and the like should be abolished. They basically put farmers – especially politically well-connected ones – on welfare. And create distortions in the market.

The Department of Homeland Security should be abolished. In particular the Transportation Security Administration [TSA], one of their many divisions.

If airline security is necessary – if it actually makes sense to screen people before they get on planes – it should be the job of the airlines, not the government. Airlines shortsightedly offloaded the responsibility and cost of maintaining security to the taxpayer. But the costs should be reflected in the cost of flying. Air travelers who actually use this service – if that’s what it is – should pay for it. But it’s probably not necessary in today’s world of secured cabins.

What kind of middle-aged people – 60,000 of them – are willing to wear costumes and go through the dirty laundry of their fellow citizens, and interrogate them, for $15 an hour? It’s ridiculous and degrading theater.

Speaking of flying, the FAA [Federal Aviation Administration] should be privatized. In particular its critical Air Traffic Control division, which is always a generation or two behind in its technology. That’s not going to improve, because funding from a bankrupt government will be increasingly sparse.

Justin’s note: Tomorrow, we’ll share part 2 of our conversation, where Doug and I look at what the shutdown could mean for the National Park System as well as the Department of Defense.

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