This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Two-Country Solution to a Government Shutdown: Opinion

Stocks in this article: AMZN T VZ TMUS S

NEW YORK ( TheStreet) -- We are, yet again, on the brink of another so-called government shutdown. Democrats and Republicans are locked in battle of irreconcilable differences. No matter the outcome, one of the two parties will emerge unhappy with the result.

It need not be this way. Democrats and Republicans could each have their way on the government shutdown issue and the underlying debt limit.

Before I explain how, let me first mention that a so-called government shutdown isn't quite what it sounds like. Most of the government shuts down at 5 p.m. on weekdays, and it remains shut 24 hours a day on weekends. Some would say it is also shut for lunch approximately two hours per day.

In a country divided approximately 50/50 and steeped in the idea that we should have freedom of choice, it seems highly limiting that we should be forever trapped in unhappiness and defeat. Our national divide cuts across almost every economic and cultural issue: health care, education, industrial policy, taxes, the legality of 16 oz sodas and so forth.

Normally, if you have two visions for how to run something, you don't force yourself to sit under the same tent and rule with majority edict. Bill Gates and Steve Jobs were both born in 1955, and they both started computer companies in the 1970s. Can you imagine if Gates and Jobs had been forced to conform to the other person's wishes inside one company?

Amazon (AMZN) has taken this to heart in terms of how it runs its products. It famously runs "A/B" experiments to see which method works the best. Half of their consumers are confronted by one version of Amazon's experiment; the other half encounter the second version. Then Amazon picks the best outcome and pits that against yet another new Amazon sales experiment.

Here is how the Federal government could learn from Jobs/Gates starting in the 1970s and from Amazon in recent years: Divide America into two halves, and let Republicans and Democrats practice their own ideas freely in each.

In the case of government shutdown and debt limit, here is how it would work: First, each half would be saddled with half of the current debt and half of the ongoing federal budget. Second, each of the two newly created countries created would proceed according to their chosen paths:

1. The Democrat half:

The debt limit would be lifted or simply abolished forever. The government would spend as much money as it could get its hands on through a combination of taxing, borrowing and printing. The sky would be the limit. Print, borrow, tax -- rinse, repeat.

2. The Republican half:

The debt limit would not be lifted and, as a result, government expenditure would be cut by a double-digit percentage immediately. All government borrowing would end immediately, as would all printing of money. Government bureaucrats would be laid off, their budgets eliminated and they would have to either find jobs in the private sector or move to the newly created Democrat country where demand for them would theoretically be infinite.

Neither the Republican half nor the Democrat half would have any logical reason to oppose this proposal to give each side precisely what they want. I'm sure Steve Jobs and Bill Gates, too, were very happy not to be subjected to the other guy's dictates under one common tent.

How and where to draw the border as we divide in the United States into two distinct parts? Some time in the last year or two, someone sent me this map as a suggestion that seems to make good sense.

The split itself wouldn't be totally painless. States may be red and blue but there is some degree of a mix in every zip code, let alone every state. Yes, some states are bordering on 75/25, but there are plenty others right near the 50/50 mark -- the swing states.

Clearly, some people would choose to move.

One further problem is the possible goal of geographic continuity. If this is a necessary objective, the two coasts have to be connected somewhere through the relatively rural center of the country. Then again, it's not a given that this needs to be an objective: Hawaii and Alaska aren't connected to any other state anyway.

Someone will argue even further: Why divide America into two? Why not three or four? There are over 300 million people in this country, more than in all but two other countries. Even if we divided it into four, each part would be about as big as Germany, population-wise. Surely in any other market we deserve four competitors.

For example, there are four major cellular network competitors in the U.S.: Verizon (VZ), AT&T (T) , Sprint (S) and T-Mobile (TMUS). Why not also four nations with four different policies for debt limits, government shutdowns, and more? Why in the land of the free should we not have a choice about this?

Just like AT&T in 1984, America has become too big and needs to be broken up. A hippie in San Francisco has absolutely zero in common with a rancher in rural Texas. To force these people to live under the same government policy tent is nothing sort of cruelty.

Should we increase the debt limit? Should we "shut down the government?" Yes and no, no and yes. We should be given the freedom of choice as a result of splitting the country into at least of two parts.

There, problem solved!

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs