Tuesday, October 01, 2013

Government Shutdowns, Funding Gaps, and Panda Cams

With President Jimmy Carter watching, Benjamin Civiletti is sworn in by Chief Justice Warren Burger as U.S. attorney general on Aug. 16, 1979. The following year, Civiletti issued a legal opinion saying that federal work cannot go on until Congress agrees to pay for it.
Government shutdowns were so common before 1980 that government workers just kept on working believing Congress would get around to passing a budget. And they did. Then Jimmy Carter(D) was elected, and "his Attorney General Benjamin Civiletti issued a legal opinion saying government work cannot go on until Congress agrees to pay for it." Thanks, Jimmy.

This time around, we're again warned of Armageddon, stocks will plunge, the economy will unravel, and meteors will streak the sky. None of that will happen, however. Well, except for that last one - the Orionids meteor shower will be active from October 17 to 25. The cheap suit unravelling of the economy may be Wall Streets worst fear, but is hardly likely in the long run as previous government shutdowns have shown such fears to be overwrought.

Since 1976, there have been 17 government funding gaps and shutdowns lasting between 1 and 21 days (some say 28 days, but I think they're counting the Christmas and New Year holidays when government is shutdown anyway.) A funding gap is the situation in which federal agencies continue to operate without a regular appropriations bill, while a government shutdown closes only non-essential services like national parks and museums. Because Obama* has made huge increases to government, some 800,000 federal workers will be sent home until a deal is struck. Such  closures have never caused a Wall Street investment meltdown in the past, and it's dubious one will do so now.
FUNDING GAPS AND SHUTDOWNS OF MORE THAN 10 DAYS:
— 1976 Funding gap: From Sept 30 to Oct. 11 under President Ford. S&P 500 goes from 105.24 to 101.64.
— 1977 Funding gap: From Sept. 30 to Oct. 13 under Carter. S&P 500 starts at 96.53 and ends at 93.46.
— 1978 Funding gap: From Sept. 30 to Oct. 18 under Carter. S&P starts at 102.54 and ends at 100.49.
— 1979 Funding gap: From Sept. 30 to Oct. 12 under Carter. S&P goes from 108.56 to 104.49.
— 1995-1996 Shutdown: From Nov. 14 to Nov. 19, 1995, under Clinton, the S&P goes from 592.30 to 600.07. And from Dec. 15 to Jan. 6, 1996, the S&P goes from 616.92 to 616.71.
smithsonian pandaPossibly the most egregious result of the government shutdown is that the Panda-cam at the National Zoo will go dark. Exactly why the Federal government is funding a 24 hour camera in the panda enclosure when Nancy Pelosi told CNNs Candy Crowley in an interview Sept 23, 2013 that the federal budget can't be cut any more "[b]ecause the cupboard is bare. There’s no more cuts to make. It’s really important that people understand that. We all want to reduce the deficit. …You cannot have any more cuts just for the sake of cuts." is an argument for another day.

1 comment:

Anonymous said...

Every time I hear Pelosi's name, I think of the most urgent cut we need to make.

Don