What They Spent During the "Shutdown" Will Make You Sick!

If you want to determine the financial health and sustainability of any individual, any household, any business, all you have to do is look at what it brings in vs its expenditures. How much does it make vs how much it has to spend to survive.

Most people don’t know this, but the owners of these United States have defined this land mass in their own document title 28 section 3002 15 (a) as a federal corporation. So what you thought was a country is a company and you’re not a part owner you’re a tax slave keeping the machine going through your slave labor.

In Austrian Principles of Microeconomics courses, it’s necessary to consider whether a firm should shutdown some line of production. A firm shuts down when it ceases operations, when it closes down and stops its production. The firm stops spending money on everything except its fixed costs.

Most people are completely unaware that a federal GOVERNMENT “shutdown” has a completely different meaning.

There has been much hand wringing over the latest government shutdown that began on December 22 of last year. The Treasury department, with its Daily Treasury Statements, has provided us with details regarding federal spending through January 18. So we have the data on the first four weeks of the shutdown. Let’s try to determine the definition of a government shutdown.

In order to have some baseline for comparison, consider the budget for Fiscal Year 2018. The Treasury Department reports on all of the dollars withdrawn from federal accounts. In one sense, this is all federal spending. In FY 2018 (and check this out because these numbers seem unreal), withdrawals from federal accounts totaled $13,961.9 billion. That works out to a daily average of $38.3 billion to keep this beast called the federal government alive. The number alone is shocking, obscene and criminal.

In the first 28 days of the shutdown, the feds total withdrawals were $1,163 billion. That’s a daily average of $41.5 billion. If we define federal spending as the total withdrawals from federal accounts, then average daily spending during the shutdown is about 8.5% higher than it was in Fiscal Year 2018.

However, the federal government is rolling over a large amount of its debt. It is issuing new government securities and using the funds from the sale of these securities to pay for previous securities that have come due. These withdrawals are under the line item Public Debt Cash Redemptions. It’s analogous to a company borrowing money to make the principal payments on its debt.

The bulk of federal spending is this type of spending. The reason this spending number is so high is because of this debt service. Or the payments on the interest of the loan.

Most everyone, all households and businesses, would classify loan payments as spending, even if they financed the loan payments by borrowing money. However, most analysts, when they discuss federal spending, conveniently omit this debt service. They usually only include the other types of spending. So let’s take a look at that.

In FY 2018, federal withdrawals (spending) not including the debt service (PDCR) totaled $4,757.8 billion. That’s a daily average of $13 billion. (keep in mind that two-thirds of federal spending in FY 2018 was debt payments. This should make us uneasy regarding the federal government’s long term financial viability.)

For the first four weeks of the shutdown, December 22, 2018 to January 18 of this year, withdrawals minus PDCR totaled $338.5 billion for a daily average of a little more than $12 billion.

So by this measure of federal spending, the feds spent on average 7.3% less per day during this shutdown than they did in FY 2018.

Regardless of your position on the shutdown, we should recognize the utter deceit involved in calling this a shutdown. Spending $12 billion per day is not a shut down. Spending 7% less than you spent last year is not a shutdown.

Calling any budget impasse a shutdown is just another example of the political corruption and deceit of our language.

And in times of universal deceit telling the truth is a revolutionary act.

Leave your thoughts about this for the world, the google thought police and the spend thrifts manning the helm of the federal government in the comment section below.