Bradford DeLong considers the implications of Donald Trump and friends' effort to orchestrate an unnecessary US federal government shutdown

The threat of a Christmastime government shutdown sparked by America’s chief Scrooges, Elon Musk, Donald Trump, and J.D. Vance, has been narrowly averted. Nonetheless, it is worth reviewing what happened, because the episode perfectly foreshadows the dysfunctional governance that awaits the United States (and the world) when Trump takes office in January.

On the eve of the December 20 deadline for passing a bill to keep the federal government funded, the US House and Senate leadership arrived at a compromise that would buy them another three months. Neither party was particularly happy with the deal, but all could live with it. They had the votes to pass it, and President Joe Biden’s staff was willing to put it in front of him for his signature.

But then Musk went berserk, fueling a “backlash” to the stopgap bill with “false and misleading claims,” as Politico put it, and stirring “Republicans into a frenzy with 100-plus posts on X.” Among his inaccuracies was that the bill would fund the development of biological weapons, when in fact it would fund labs where any future plague could be contained and studied. (We should not forget that COVID-19 was not nearly as infectious or deadly as, say, Ebola; we cannot count on being so lucky next time.)

Musk also falsely claimed that each member of Congress would get a 40% pay raise, when in fact they are scheduled to get a 3.8% cost-of-living bump regardless of the bill under consideration. According to Musk, the bill contained a $3 billion subsidy for a new stadium for the Washington Commanders (NFL football), when in fact it would transfer the site of RFK Stadium – where no NFL team plays or has plans to play – to the District of Columbia government so that the site can be redeveloped.

These are just a few of Musk’s many falsehoods. They were plain as day, and yet Musk succeeded in intimidating Republicans with his promise that “any member of the House or Senate who votes for this outrageous spending bill deserves to be voted out in 2 years!” Instead of pointing out that Musk does not know what he is talking about, Republicans fell into line.

According to what GOP representatives were saying as of the morning of December 18, Trump himself had no problem with the bill. Yet by that afternoon, he and Vance had gone on the offensive, calling congressional Republicans “foolish and inept” for “allowing our country to hit the debt ceiling in 2025.” Now, they must pass a “temporary funding bill WITHOUT DEMOCRAT GIVEAWAYS combined with an increase in the debt ceiling. Anything else is a betrayal of our country.”

In any case, as of December 19, the Democratic leadership in the House no longer knew who was in charge and who they were supposed to be negotiating with. Is Mike Johnson really the Speaker of the House, asked Jamie Raskin, “Or is it Donald Trump? Or is it Elon Musk? Or is it somebody else?” (In fact, Senator Rand Paul floated the idea of installing Musk as Speaker.)

In the end, Johnson and House Minority Leader Hakeem Jeffries cobbled together a last-minute deal that includes substantial policy concessions to Democrats and no increase to the debt limit, an outcome that amounted to a policy defeat for Trump, Musk, and Vance. But they won’t care, because policy does not concern them. Trump and the incoming Republican congressional majorities know they have the fervent support of predominantly low-information – or downright misinformed – voters. And those voters won’t care (or even know) that more Democrats than Republicans voted for Johnson’s House bill (prompting Musk to ask, “So is this a Republican bill or a Democrat bill?”).

Such is the state of American politics and governance today. It now channels the performative style of professional wrestling. The basic democratic decision loop – in which voters elect officeholders who devise policies with effects that inform the outcome of subsequent elections – is now totally broken.

There will be consequences, though, and it is not entirely clear that Trump, Musk, and Vance have factored them into their calculus. As Paul Krugman points out, “since the election financial markets have clearly been betting that Trump will do very little of what he promised during the campaign … discount[ing] the disastrous consequences that would follow” from trade wars, mass deportations, and so forth. But the market increasingly appears to be mistaken. An unnecessary and avoidable “government shutdown in response to completely false claims about what’s in an innocuous short-term funding measure suggests that the peddlers of misinformation are high on their own supply.”

Could Republican legislators regain the ability to communicate with their own political base? Could Democrats win durable, substantial legislative majorities in the 2026 midterm elections? Anything is possible, but I’m not betting on it. There is every reason to expect America’s largely broken federal government to do immense damage to the country – and Trump hasn’t even taken office yet.

J. Bradford DeLong, a former deputy assistant US Treasury secretary, is Professor of Economics at the University of California, Berkeley, a research associate at the National Bureau of Economic Research, and the author of Slouching Towards Utopia: An Economic History of the Twentieth Century (Basic Books, 2022). Copyright: Project Syndicate, 2024, and published here with permission.