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Shutting down the U.S. government for lack of a bipartisan agreement has always been more of a symbol than a shuttering reality. Certainly, it doesn't get much more symbolic than cordoning off the Washington Monument or the Lincoln Memorial and locking the doors to the Smithsonian Museum. About 800,000 federal employees across the country would be locked out of their jobs, The New York Times reported.
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And what do you get when the public views a compromise as one or the other of the parties buckling under pressure? A government shutdown is lose-lose. A compromise is lose-win.
Democrats and Republicans have been squabbling over $5 billion -- the difference between the two sides that is, essentially, the equivalent of two football teams on either side of the 50-yard line fighting over less than an inch of territory. For that, we should shut down the whole shebang?
The Washington Post reported Friday Republicans would now be content with $39 billion in budget cuts while Senate Majority Leader Harry Reid, D-Nev., and President Barack Obama have drawn the line at $34 billion.
The real debate, of course, has yet to begin because spending between now and Oct. 1 is, again, a symbol -- or at least an example -- of how the budget shapes up for the next decade or so.
House Budget Committee Chairman Paul Ryan, R-Wis., has proposed a 10-year budget reduction of $6.2 trillion, which is closer to the mark of where a real debate should start. So far, the debate resembles going to an auction house and starting the bidding on a Rembrandt at $3.50.
Ryan proposes to privatize Medicare, turn Medicaid into a system of block grants given to states, and raise the retirement age by two years for anyone 55 years of age or younger.
That does precisely what politicians of either party are wont to do, says University of Maryland economics Professor Peter Morici. To wit: It passes the nation's budget woes onto the backs of the poor and over to state governments. The only cost-saving measure would be to raise the retirement age.
Ryan also proposes, absurdly, to cut the top tax rate for corporations and wealthy individuals from 35 percent to 25 percent. The claim is that this will prompt economic growth.
All things being equal, lowering taxes for wealthy individuals would prompt more spending, but much of that would be spent on trips abroad, investment in vineyards in France and on German cars. A fair amount of corporate expansion in recent decades has gone toward expansion overseas. A lower tax rate that provides for domestic spending is a certain boon, but handing the wealthy more U.S. dollars to spend at their discretion is just a Republican habit of giving away the store. It fills political war chests. But playing the sap is not the answer. That should be resisted at all costs.
In international markets Friday, the Nikkei 225 index in Japan gained 1.85 percent and the Shanghai composite index in China rose 0.74 percent. The Hang Seng index in Hong Kong rose 0.47 percent and the Sensex in India fell 0.71 percent.
The S&P/ASX 200 index in Australia rose 0.66 percent.
In midday trading in Europe, the FTSE 100 index in Britain gained 0.94 percent while the DAX 30 in Germany rose 0.59 percent. The CAC 40 in France climbed 0.89 percent and the Stoxx Europe 600 index gained 0.42 percent.
