As a budget agreement was finally reached at the 11th hour on Friday, so too the US nation breathed a collective sigh of audible relief. While public sector workers and the families of military representatives celebrated the late resolution, so too government officials assured citizens that they would learn from the lessons of a poorly administered budget. However, given the revelation that top senate officials would have continued to receive pay while those beneath them felt the force of any partial government shutdown, questions have been raised about the influence of capitalism within a democracy. Capitalist Values in a Democratic Society The idea that the powerful should continue to receive their pay while those who they serve are left temporarily without salary epitomizes the very worst of capitalism, where influence dictates the distribution of a nations wealth. This notion is troubling enough in a focused and dedicated democratic power, but it is even more worrying when you consider that these individuals in question were responsible for the prolonged budgetary negotiations in the first instance. Now, this does not mean that capitalism or its principles are divisive in society, or entirely opposed to those which exist in democracy. After all, capitalism supports the freedoms of of enterprise and unlimited trade, and affords individuals the tools to design, create and operate their own business entity. Not only this, but such a concept gifts these individuals the opportunity to shape their own financial destiny, and take tentative steps to becoming the job creators of the next generation.
Yesterday we discussed the current stalemate facing the US government, and the potential for a federal shutdown that would have a discernible impact nationwide. However, while opposing factions of government and personal persuasion are having a stalling effect on the negotiations, it is interesting to consider exactly what the consequences would be should a resolution fail to be reached by midnight on this coming Friday. Of course he concept of a federal government shutdown, whether it be partial or more widespread, is one that causes great concern for citizens. However, it is a rather vague and ill defined notion, and one that gives little indication as to the exact implications for society at large. So, what would be the immediate or long term consequences of enforced government inactivity, both in terms of the nations financial performance and the welfare of its workers and citizens? The Financial Implications for a Nation Financially, the partial closure of government institutions would be especially troublesome, and would create specific issue with regards to tax assessments and the funding of public sector ventures and small business enterprises. In a depressed fiscal climate, the forced inactivity of public sector bodies and their workers will only serve to slow the processes of economic recovery, and create an unhealthy cycle of increasing unemployment and subsequent closure of small and independent businesses.
Of all the uncertainties that exist in the contemporary world, you would not include the function of your government as being amongst them. Regardless of the popularity of it's actions or the results of their decision making processes, the government are omni-present in our day to day existence, making conscious and considered strides towards a state of sustained prosperity. However, as democratic and republican representatives failed to reach a budgetary agreement this week, the US is now facing up to the prospect of a partial federal shut down. The US government have until midnight on Friday to reach an adequate compromise, and ultimately present a clear and concise expenditure plan to ease the nation through its period of economic recovery. However, with warring political factions at odds over the course the country should take and who is responsible for the vast budget shortfall, an agreement seems to be moving further away from the grasp of those who seek to protect the citizens of the US. An Need for Compromise Significantly, both parties are opposed in exactly how to reduce the budget deficit, and which areas of public spending should be cut to negate the crippling economic shortfall. While this is understandable when you consider the conflicting principles of each party and their own individual interests, this verbal war of attrition is influenced by other less relevant factors. Of these, the apportioning of blame and responsibility for the nations fiscal woes appears as the most significant.
Budget restrictions are in inevitable consequence of a recession, especially one which itself is the result of irresponsible fiscal management. Subsequently, society and its individuals are forced to endure several significant economic sanctions, which include sizeable reductions in public expenditure and also inflated levels of income and duty tax. While these are an accepted if much maligned aspect of economic recovery, there are serious questions as to how far governments should go to deliver financial stability. This week, the governors of Michigan supported a move to close up to 70 schools in the troubled city of Detroit, with a view to halving the number of educational outlets in the region by the year 2014. This proposal is in addition to the legislation that closed 59 schools throughout 2010, and will mean that the average high school class would include an estimated 60 students by 2012. Regardless of the economic need, the question that needs to be addressed is whether this sacrifice is worth any amount of fiscal saving. The Social Cost of Budgeting This decision is been driven by a desperate need to reduce a vast $327 million school budget deficit, regardless of the cost to the educational well being of US students and parents. This is a government stand point, which states that there are bound to be unfavorable consequences of an economic recovery from a recession, and that the closure of schools is a necessary evil in the pursuit of financial prosperity. The issue with this assertion is that by doing whatever is necessary to secure a short term financial future, there is the potential of damage being done to the long term education of high school children.