Justin’s note: Today, Doug Casey and I continue our conversation on the government shutdown… and what it really means for America. If you missed the first part of our discussion, make sure to catch up here.


Justin: What about the National Park System? National parks have closed due to the government shutdown.

Doug: True, the National Park System has been thrown into disarray.

This is another aspect of the government that should be privatized. The parks should be sold to corporations with the provision that they be maintained as parks. They could also be spun off into corporations, with the shares distributed to American citizens. There’s no reason they should be a government function anymore than Disneyland should be. If they’re profitable, they could pay dividends to the people, instead of extracting taxes from them.

In today’s world, I’m surprised the usual suspects don’t accuse the Park Service of racism. Parks, museums and such are overwhelmingly used by a certain class of white people – very few blacks from the ghetto are to be seen in Yellowstone. The same is true of BLM [Bureau of Land Management] land used by hunters. It’s likely someone will throw in a charge of sexism, since almost all hunters are men.

But services like parks and museums are always the first things cut. Why? Because they make people feel like the government is necessary. When in fact it has no business running them in the first place.

The United States Department of Housing and Urban Development [HUD] absolutely should be abolished. It’s responsible for “projects” like the Cabrini-Green and Pruitt-Igoe. It destroyed what were called “slums,” and replaced them at huge expense with dehumanizing, intensely dangerous, vertical ghettos. Slums were at least privately owned and didn’t make the residents feel like animals in a zoo. HUD’s “projects,” along with the approximately 70 different welfare programs, destroyed black culture and cemented the unfortunate residents to the bottom of society.

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Perhaps people living in HUD’s horrible buildings should just be given their apartments. That way, they’d at least have an asset that they would be responsible for. Right now their “homes” are just active liabilities for taxpayers. When you have a lousy investment, you should cut your losses.

Another government agency that’s been affected by the shutdown is the United States Agency for International Development. It administers civilian foreign aid and development assistance.

It has an operational budget of only $27 million [admin costs]. The problem is the U.S. government gives away around $50 billion of civilian aid – not counting military aid – to foreign governments. Israel alone gets about $3 billion, and it’s a rich country.

If Americans want to help poor people in foreign countries, they can do so directly through charities. In fact, though, most of the money that goes out in foreign aid is actually a transfer from poor people in the U.S. to rich people abroad; they’re the ones who get the money first. The proper amount of U.S. government foreign aid is exactly zero. $50 billion a year is a fair amount of money.

The Small Business Administration [SBA] is another useless government agency. It makes loans to businesses that aren’t viable enough to either raise capital from friends and family, banks, or the stock market. So, they get a handout from the government.

It shouldn’t exist in a capitalist economy. Its bureaucrats know almost nothing about business; it misallocates and destroys capital.

The U.S. Securities and Exchange Commission [SEC] is another one. It really should be named Swindlers Encouragement Commission because the SEC has never headed off a major scandal of any type. Bernie Madoff is an off-hand recent, but there are many others.

It uses its $2 billion budget to clog up the stock market. Its indirect cost to the economy is vastly greater, however, requiring legions of otherwise unnecessary lawyers to generate thousands of tons of documents that very few investors read. Perhaps worst of all, it makes the average stock investor feel that he’s somehow protected – when he’s not.

Crimes or frauds should be handled by an efficient court system. But let’s not get into that.

I realize it may sound perverse, but I hope the shutdown goes on for months. Why? Because maybe people will start asking themselves, as we’ve been doing here, what useful purpose these agencies serve. Also, after a while, many of their employees hopefully will drift off, and find productive labor.

I realize, of course, that’s just a pipe dream. More likely the government will form another agency to ensure there’s never another shutdown. Of course the Big Shutdown is guaranteed. That will be when the government – which has a life of its own – can no longer borrow a trillion dollars a year. Or sell that much debt to the Federal Reserve. Soon it will be borrowing two trillion. It’s hard to say exactly when the balloon will meet the pin.

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Justin: Doug, the Department of Defense hasn’t been affected by the government shutdown yet. Are you surprised by this? I mean the Department of Defense is by far the biggest department of the government. You’d think that would be the first place the government could release some unnecessary employees. But it has been spared so far.

Doug: That’s right. The U.S. government spends about as much for “defense” as the rest of the world does put together. Not counting the fact much of its budget is hidden in other agencies. At least Trump may be pulling out of Syria and Afghanistan. You now, it’s funny when you think about the vaunted $50 billion “peace bonus” that everyone was touting after the USSR collapsed. That’s not even a rounding error now…

Aside from the military, however, the biggest expenditures are Social Security, Medicare, Medicaid, and interest on the national debt. About 70 percent of all government spending goes into those things alone. None of that spending is going to be cut.

Frankly, the financial situation of the U.S. government is totally beyond hope of redemption. The current shutdown is just ritual Kabuki theater – completely meaningless in face of the real problems. And it’s completely irrelevant whether the Republicans or Democrats are at the helm. At the top levels, they’re both partners in the Deep State. They just differ in personality and rhetoric. As Dick Cheney – I forget if he was a Republicrat or a Demopublican – once said, “deficits don’t matter.” And they all believe exactly that.

Justin: Thanks, Doug.

Doug: You’re welcome.


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