This is the Cato Daily Podcast for Wednesday, April 6, 2011.

I'm Keelab Brown.

With a government shutdown looming, the political stakes may be quite high,

but in terms of policy, what emerged following the last government

shutdown was a large shift downward in the trajectory of government spending.

That says Cato Institute Senior Fellow Dan Mitchell should be the goal of Republicans

negotiating the future of federal spending. In November in 1995 Republicans

had a big government shutdown fight with Bill Clinton, very much similar to what we're going through today.

And the conventional wisdom is that Republicans lost that fight,

although largely that conclusion stems simply from the fact that Bill Clinton

polled better than Newt Gingrich. If you actually look at what happened in terms of

government policy, government spending only grew 2.9% a year for the next four years and we

went from a big budget deficit to a big budget surplus because we had that prudent

fiscal policy. Not only that we also had a tax cut on capital gains during that period

and politically for Republicans who somehow think that today a shutdown would be terrible news for them.

Republicans actually picked up seats in the Senate and only lost nine out of their 54 new seats

in the House after the 1994 landslide.

So from a policy perspective, which we care about, they shut down debate in

1995 was very good and for some of our friends on the hill who only look at

politics, they came out of that process pretty well.

Republicans controlled both the House and the Senate as of 1995,

and Bill Clinton seemed to be less committed to his financial fiscal program than Barack Obama does today.

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