Professionals are Predicting a GDP Loss over the Government Shutdown: I think not

It is interesting that many investment firms and others connected to the financial world are predicting zero GDP growth in the first quarter of 2019 due to the government shutdown. I am not so sure that will be the case, in fact, consider what might happen should we discover that GDP growth remained at 3% to 4% in spite of 800,000 government workers stuck in limbo over the budget problem between the Trump White House and House Democrats who are refusing to make any concessions on a border wall. Gas prices are lower than they’ve been in years, taxes are lower and money is flowing quite robustly. If the GDP doesn’t fall as many are predicting, what would that do to future leverage that Democrats have over government shutdowns? What would happen once people realize that the government working or not doesn’t affect them very much and where it does, new methods of service should already be in place to prevent a loss in services.

Let’s face it, much of this “no work extortion” was designed by government labor unions to make it painful for voters to not pay for government services, by attaching very static services to consumer needs without regard to economic expansion. Actually, the goal of GDP stagnation was always the hope because it forced people to continue paying taxes and extraordinary fees for government workers in an inflated fashion just because people didn’t want to deal with the loss in services. But we live in the day of the smart phone, of Amazon where you can get anything anywhere at any time. Why should government be able to impede goods and services artificially—and why should a loser like Chuck Schumer and Nancy Pelosi be able to use a government shutdown as a means of bringing the American economy to a halt?

In reality, I don’t think the world cares about the shutdown. I don’t think the GDP of the United States will even notice—in one report I heard one of the reasons given was that government workers weren’t flying around doing business and that would account for a loss in GDP. Well, with fuel prices down and more expendable income in people’s pockets, I don’t think any of those losses in government transportation is going to amount to much and will easily be offset by the civilian sectors. So where is all this loss in GDP going to come from? Government doesn’t make anything and what they do interact with shouldn’t stop productivity from happening except where they have been artificially inserted by law, as opposed to a genuine need by market forces.

As I have been saying for many years, the socialism that has been taught in our public schools is hitting a critical juncture, many of those little kids are now in the market and interacting with the world, and socialism is very much their political platform. You can see that easily by some of the new members of congress. Additionally, many of the new Democrat 2020 presidential candidates are openly socialist and talking about confiscating businesses to redistribute wealth from those who have it to those who want it. They are openly talking about these things these days instead of hiding it. I think that is because of Trump’s victory in 2016, it forced the radicals working in our government to accelerate their long time plans and the same thing is happening in regard to this government shutdown. There is a race to make the final case for socialism before people discover that everything they have been taught their whole lives in public education was a lie. The election in 2020 is really the last time that socialists are going to have a shot in the United States before people realize that the economy is much better off under capitalist influence rather than centralized socialist mechanisms by incompetent insurgents.

That is after all how so many government jobs were placed in the way of the free market, to hopefully stop an economy if the government led by some conservative radical wanted to shut it down to make a point. The safety valve would be to wreck the economy and prevent conservatives from ever doing such a thing in the future. But what if conservatives stuck together and forced the revelation of such a scheme to be known with continued growth of the GDP even during a government shutdown? Then what happens? Of course, the answer is that government doesn’t really do anything to help our economy, it actually hinders it. With government out-of-the-way, the GDP should increase and that is the big secret that nobody wants to let out to the public. And with the market watchers leveraging their investments knowing the world of government and how much pain it can give them, they are saying all the things to make the beast happy and off their backs. But they know that free market forces unleashed will continue to expand the GDP of a nation, not whether government workers are there to stand in the way.

At the heart of this debate is the role government plays in the economy, socialists want to think of the government as a major employer, capitalists want the government out of their way as much as possible. That means that for the first time in American history we are about to learn to what extent the government actually plays in the economy because we have a president who actually understands economics, better than any advisors in the matter. And we’ll see how it turns out, but I’ll make a prediction, I don’t think its going to make much difference. The economy has a lot of money flowing through it, the trade deals that are being made are generating revenue for the American treasury and China is drowning currently. Instead of all that money flowing into their economy, its flowing into the American economy and that is something that the big government types just can’t bring themselves to an admission. The issue has a duel cut for them, first it shows that the communist Chinese were never as powerful as everyone had projected them to be, and second, it shows that government really doesn’t have any power. Government is not the king makers that liberals had always dreamed of, a free market system can’t be stifled when pure economics are applied.

Only when artificial constraints are placed on the ambitions of a nation’s GDP can an economy really be stifled to a zero sum. And Trump knows better than to buy that line of dialogue. He’s holding out so that the truth can be witnessed and when it is, then what? What will Nancy Pelosi and Chuck Schumer say on that day in March and April when it’s revealed that GDP actually was not impacted by the government shutdown. What happens in the future then? The answer is that the extortion racket will lose its bite and I would think we’d all be happy for that. Except for those who want to see a government dominating all aspects of life. Their illusion will be crushed by such a revelation. That is what I’m predicting will happen, and as President Trump waits out the storm, I would be willing to bet that he knows it too.

Rich Hoffman

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