Washington’s federal government offices closed Tuesday, and may well close Wednesday, due to snow.
Government workers still get paid. No one seems to care, except the Washington vendors who profit from government workers' business. In the rest of the country, work goes on as usual.
Of course, government regulations continue to dictate how businesses operate, imposing costs in areas from agriculture to energy production to banking. But once rules are in place, the existence of giant government bureaucracy has little effect on businesses' daily operations.
Driving down D.C.’s empty streets, I see construction workers building massive projects on Connecticut Avenue in Northwest. If they did not show up, they would not get paid. Many people would miss them, and the building would be behind schedule.
A Coca-Cola truck is unloading outside a corner store. If it didn't show up, stores would be out of soft drinks and people would complain. The truck driver would not be paid.
No one is complaining because the Education Department and the Agriculture Department are closed. Government workers, whether the government is closed or not, still get paid.
Ordinary Americans are probably happy that the Labor Department and Health and Human Services Department are closed, because it gives them a break from new regulations. If the Department of Housing and Urban Development disappeared, few would notice.
Of course, politicians try to pretend otherwise. In October, before and during the two-week government shutdown, President Obama talked about the harm of the closure.
On Oct. 3, speaking in Rockville, Md., the president said, “But the impacts of a shutdown go way beyond those things that you're seeing on television. Those hundreds of thousands of Americans — a lot of whom live around here — don’t know when they're going to get their next paycheck, and that means stores and restaurants around here don’t know if they'll have as many customers.”
Statistics tell a different story. In October and November, job creation was higher than average. The economy created 200,000 jobs in October and 241,000 in November. The average of the other 10 months was 174,000. So much for disaster.
Politicians are trying to pretend that the sky will fall if the federal government does not extend unemployment benefits beyond the standard 26-week duration.
But in North Carolina, where benefits declined from 63 weeks to 19 weeks last June, employment grew by 22,000 between June and November. It declined in the surrounding states of Virginia, Tennessee and Georgia, and increased slightly in South Carolina. In the rest of the country, employment declined slightly.
North Carolina also did better than its border states and the United States as a whole in the Labor Department’s survey of establishments.
Mandatory spending has grown from 9 percent of GDP in 1977 to 14 percent in 2013. The government is functioning as a huge ATM, giving out larger amounts of benefits. As long as the ATM works, no one cares if the bank is open or who staffs it.
New York University professor Paul Light has described the sequester as a unique opportunity to reform government bureaucracy.
He has suggested ending duplication among programs with identical missions, getting rid of the 1,500 assistants to political appointees, cutting 40,000 management jobs and eliminating many of the jobs soon to be vacated by baby boomers, or waiting six months before filling them. Light believes the government could save $1 trillion over 10 years with a variety of reforms.
Rather than using the sequester to reform government, Congress and the president suspended the sequester. Tuesday's government closure shows that we do not miss the vast bureaucracy.
Examiner Columnist Diana Furchtgott-Roth (dfr@manhattan-institute.org), former chief economist at the U.S. Department of Labor, is a senior fellow and director of Economics21 at the Manhattan Institute for Policy Research. You can follow her on Twitter here.
Clik here to view.
