In what some might view as a dramatic showdown, the Democrats are staring down a government shutdown with an air of melodramatic dread, while the Republicans, or more aptly, the Trump administration, seem to be whistling a merry tune. Some might call this brinksmanship, but with bloated government programs on one hand and taxpayer savings on the other, what’s not to like about trimming down the fat? The White House, through its Council for Trade and Manufacturing, Peter Navarro, has suggested that this effort is akin to a long overdue cleanse. It’s a moment of fiscal sanity that seems to disregard all the hand-wringing coming from the other side of the aisle.
The Democrats, however, are busy with plans that, to some critics, sound suspiciously like pie-in-the-sky dreams. Among these are notions of extending health care to illegal aliens—never mind the price tag of such an endeavor. One imagines the warning labels on that package: “Caution, may cause taxpayer eyes to roll.” It doesn’t take an economist to appreciate that the Trump tax cuts, which specifically targeted Medicaid and Obamacare to legal residents and citizens, represent a substantial taxpayer saving—around $100 billion, to be precise.
In a fit of financial common sense, these cuts have put the brakes on state-level attempts to saddle the federal government with costs for emergency room care extended indiscriminately. Critics argue such free-for-alls were nothing short of state-sponsored scams. One state governor thought this was a particularly nifty trick to the tune of $35 billion. But, alas, those days seem numbered. Now, states can’t treat the federal government like an emergency room ATM without drawing some hefty criticism from tourism industries on the fiscal irresponsibility of it all.
It seems the Democrats are ensnared in a bind of their own creation, worried about being upstaged by the more radical members within their ranks. To the casual observer, this might appear to be a case of being hoisted by one’s own petard—trapped by the very policies they are pushing. Moderate Democrats find themselves in the uncomfortable glare of being painted as traitors or, horror of horrors, centrists, by more left-leaning colleagues. For those Democrats bracing for primary challenges from fringe elements within their own party, it’s the political equivalent of being raked over hot coals.
With all this high-stakes drama, it’s easy to see why Wall Street seems largely unconcerned, almost nonchalant. With fiscal responsibility as the latest rave, markets are basking in the glow of a predictable Trump economic playbook. Austerity measures, after all, are not just a buzzkill for big spenders; they’re a delight for bond markets. Less spending might not fuel feverish growth fantasies, but it does keep inflation on a tight leash, and that’s music to any fiscal conservative’s ears. In the coming days, the nation will watch this thrilling legal version of tug-of-war unfold, likely offering all the twists and turns of a reality show, politics-style.
