A government shutdown sounds like the end of the world. Your parents won't get their social security checks; lights will go out in hospitals; and military families won't be able to put food on the table.
That's what some of the most hysterical news reports are preparing us for. But for the most part, these scenarios are fiction.
We've been through more than a dozen shutdowns in the past 30 years. The longest one lasted 21 days, from Dec. 15, 1995, to Jan. 6, 1996. About the worst thing that happened was that a lot of legal cases got held up, particularly drug and immigration cases. Some federal contractors had to put their work on hold. And a lot of folks couldn't get gun permits or visit Yellowstone. But federal guidelines are clear that essential governmental activities, involving national security and the public health, will be unaffected.
Reports that suggest otherwise are lies.
What is not a lie is the dire news about our budget. Our friend Terry Jeffrey from CNS News picked through the U.S. Treasury's March statement and discovered exactly how far behind the eight ball we really are. If you think all this talk about deficits are scare tactics, than pay close attention to this.
The U.S. Treasury collected $194 billion in taxes last month. During the same month, the government spent more than $1.1 trillion on expenses. In other words, we're laying out six times more than what we're taking in … six times! Now, most of these expenditures were used to pay back short-term debt, for which we just issue more debt. But if interest rates go up, or foreigners stop buying our debt, we're screwed.
The Republican budget is the first budget in a long while to recognize that we're on the cusp of an economic explosion that could make the subprime mess look like a day in kindergarten.
And yet most Democrats keep whistling past the graveyard. In fact, we're already hearing talk about "heartless budget cuts." But what's really heartless is making promises to folks that we can't possibly pay for.
The president and Nancy Pelosi started up trillions of dollars worth of new spending programs, with no real money coming in to pay for them. We've been able to fake it for a couple of years by getting the Fed to print dollars and buy up our debt. But the Fed says it's going to stop doing that in June, because even Ben Bernanke's starting to get worried about inflation.
So, before anyone starts fretting about a government shutdown, what we should really be fretting about is the coming explosion of a fiscal pyramid scheme that's about to collapse. That's a real-life horror story that should scare the daylights out of all of us.
David Asman joined FOX News Channel (FNC) in 1997 and currently serves as host of "Forbes on FOX," a weekend half-hour program that offers an informative look at the business week (Saturday from 11:00-11:30 AM/ET). Asman is also an anchor on FOX Business Network, where he co-hosts "After the Bell" (4-5 PM/ET) with anchor Liz Claman.