The One Benefit Of A Shutdown

As a government shutdown starts to look inevitable and the harms it will cause become apparent, Ezra Klein points out that there is one good thing about a shutdown. It may allow us to avoid an even worse crisis; the default associated with not raising the debt ceiling.

Moving the one-year delay of Obamacare to the CR maximizes the chances of a shutdown but makes a default at least somewhat less likely. If a shutdown begins Monday night, Republicans and Democrats will have more than two weeks to resolve it before hitting the debt ceiling. . .

One way a shutdown makes the passage of a debt limit increase easier is that it can persuade outside actors to come off the sidelines and begin pressuring the Republican Party to cut a deal. One problem in the politics of the fiscal fight so far is that business leaders, Wall Street, voters and even many pundits have been assuming that Republicans and Democrats will argue and carp and complain but work all this out before the government closes down or defaults. A shutdown will prove that comforting notion wrong, and those groups will begin exerting real political pressure to force a resolution before a default happens.

It’s worth noting, for the record, that it would be vastly better if there was no shutdown and no default and House Republicans stopped trying to enact an agenda that lost at the polls by threatening the country. But American politics is what it is right now, and given its sorry condition, a shutdown might be the best of very bad options.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.