Possible consequences of the US government shutdown

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Hmm. I used to watch Laugh-in. Maybe I saw it and just don't remember it. I never was too big on Saturday Night Live -- I've probably only seen about four or five entire shows.

[youtube]http://www.youtube.com/watch?v=KFEhmF-cSi8[/youtube]
couldn't find the clip of ford.

Thanks. I remember that, but I don't remember if I saw it on the show or elsewhere.

I believe the Nixon on Laugh-In was broadcast only once on the original run of the program, it was not rerun.

But it may have been played on various other shows about Nixon much later.

Didn't Chevy Chase usually lampoon Ford?

On another note, don't most of older folks on the spectrum find it odd that most of the information gathering the GenX, GenY and younger set do are not using the legitimate news outlets (and I'm excluding Fox, MS-NBC, CNN, and Al-Jazeera Cable networks, as well as the over the air Networks in the US for right now), in favor of shows like The Daily Show and the Colbert Report? Yeah, they are lampooning what's currently happening here in the States, but come on!! !! They shouldn't be their only source of information. Whatever happened to those of us (NT and otherwise), that live in the Fourth and Fifth Estate?

chevy chase made his career on this lampooning of ford. anyways, it is like what Kahlil Gibran said about how children [gen x and such] live in the house of tomorrow, and that parents/older generation cannot enter this house, not even for a visit.

In short Gibran is saying what both my grandmothers used to say:

Each fox smells it's own hole.
You've made your bed, now LIE in it!

Laugh In was hilarious as was the first few years of SNL. Goldie Hawn was a first crush for a lot of people.

And look at the few presidents who never wanted to be president: Washington, Arthur, Ford.
Great men all of them

Perhaps you should keep in mind that furloughed government workers DO NOT get paid while on furlough. How long can you go without getting paid? Yes, we are likely to get backpay, but that doesn't pay my bills or put food on my table today. If it lasts until Tuesday, I will be helping to shutdown "non-essential" services here at a HOSPITAL, and then will be furloughed myself. Over 800,000 people have been furloughed so far, and the longer the shutdown lasts, the higher that number will go. If it lasts for an extended period of time, you will definitely start to feel the effects, unless you are independently wealthy.

Here's a few numbers for those of you who think this is no big deal:
An extended shutdown will result in the furlough of over 200,000 people.
87% of the Department of Commerce has been furloughed.
94% of the Department of Education has been furloughed.
69% of the Department of Energy has been furloughed (including the Nuclear Regulatory Comission that makes sure our nuclear reactors operate safely).
96% of the Environmental Protection Agency has been furloughed.
52% of the Department of Health and Human Services has been furloughed (including the FDA and the NIH limiting new patients to those "medically necessary).
85% of the Department of Justice, 81% of the Department of the Interior have been furloughed.
82% of the Department of Labor has been furloughed (including all of the Office of Disability Employment Policy, the Employee Compensation Review Board, and the Veterans Employment and Training Administration, and portions of The Employee Benefits Security Administration, Mine Safety and Health Administration, and Occupational Safety and Health Administration).
Almost all of NASA and the National Science Foudation and 84% of hte Smithsonian Institute have been furloughed.
Department of Transportation: 67%
Department of the Treasury: 50%
The federal government spends over $500 billion/year on government contractors, who are currently going unpaid, but will be paid for all work not done during the shutdown.

The Tea Party has a very specific demographic profile.

http://www.blairrockefellerpoll.uark.edu/5295.php

Right now we are in Phase 1 which is diddling over the ACA (Obamacare) program.

The real fight is whether to up our deficit limit.

Here is what happens if we don't. We will have to actually default on some of our loans. Then the credit rating will go from AA+ into the toilet for sure and the rate of interest paid on future load will be so high that we will dig our Hole even deeper and faster than we are now.

On the other hand if we incrementally raise the debt limit them no cure of the bad habit of borrowing and "printing" money will be at hand and we will sink into our Hole at a slower and steadier rate.

We are past the point of no return on our debt. We cannot possibly repay the loans no matter how productive the economy becomes. We are truly in the Hole and there we will stay until the Day of Ruin happens, and it will. I feel sorry for my grandchildren. When the sh*t flies it will fall all over them.

ruveyn

This is what the view looks like in my crystal ball.

The fight is an internal fight in the Republican Party, between the GOP establishment, and the TP. The goal is the primaries next year. The TP want to start taking more nominations from GOP Republicans, and they want to do it on the back of being seen to be able to do something, anything, about "Washington." Meanwhile, the GOP are happy to let the TP take credit for the shutdown (or apply blame for it), until the Republican base starts to think twice about the wisdom of this particular move.

As far as economic impact is concerned, I'm not overly worried about the public servants--they are entitled to employment insurance in any event, and the states (and DC) will strongarm the feds into ponying up the cash to pay for employment benefits. They will be cash managing their way through the autumn, but no one will starve.

Contractors with multi-year contracts will be fine. Again, they will have to cash manage through the next month or so, but I see little likelihood of large scale layoffs among contractors unless the shutdown goes past about 6 weeks or so. Again, contractors' employees will be entitled to unemployment benefits, so a hit, but not a disaster.

Contractors with year on year contracts, or contracts subject to appropriations will have a leaner time. They won't be in the same position to cash manage, because they won't be able to bill for services rendered during the shutdown. Some might make up for it in the first weeks afterward, but that depends very much on the nature of the contract.

All in all, not much more than a 1% hit on GDP, unless the shutdown runs longer that 6 weeks.

That being said, watch very closely what happens mid-month. The debt ceiling is the real power in Congress' hands, and if the ceiling is not lifted, then the Treasury has to start making decisions about which bills get paid. At that point the Administration will have the power to drive home precisely how important the federal government is in daily living in the United States.

My guess is that the Speaker already has the budget deal in his back pocket, and he is waiting for the point where the TP becomes demonized to bring it forward, and to cut them loose. The polls should tell you how long this charade will last.

Furloughed workers are not eligible for unemployment benefits (they are still considered employed). There are some states that have legislation over-riding this, though.

I am worried about public servants, myself included.
This may not seriously affect GDP if it ends soon, but to think that even a few weeks won't have devastating long term effects on an already fragile economy seems fairly short-sighted to me. And all of this is on top of a wage freeze that has been in effect since 1/1/2010, the reduction or elimination of bonuses for superior work evaluations (effectively a pay cut for top performers), a reduction in the calculations for adjusting retirement benefits, proposed increases in worker costs for retirement, and the ongoing effects of sequestration. I have already started looking for a new job, and I am fairly sure that most of the best federal civilian workers will be looking as well (excluding those close to retirement). That means that the government is going to have to recruit and train a whole new crop of talent (which will cost a fortune).

Even if you take the economic consequences out of the picture, you must consider the impact on quality of life.

If this shutdown lasts until the 15th, military personnel will still be required to report for duty, but will no longer receive paychecks until the shutdown is over. The Department of Veteran Affairs will be out of their reserve cash by the end of October, which means disabled vets will not receive assistance, and health services for veterans will begin shutting down (starting with the "least important" such as vision and dental clinics, long term care, outpatient surgery, some cancer treatments (including surgery and radiation therapy) and most portions of veterans healthcare will begin limiting patient procedures to those necesary for immediate life threatening conditions. The CDC is no longer tracking food related illness, which means an e coli or salmonella outbreak will not tracked and sourced. WIC is already down for the count, and all other food assistance will soon be on the chopping block. Federal funds to organizations such as the Red Cross has been eliminated. Federally funded education programs are already burdened by the continued sequestration, and many are now going to be shuttered altogether. The FHA is planning to furlough more than 96% of staff members, and the VA loan program will stop processing applications at some point (these two combined make up nearly half of all home loans), which I'm sure is really going to help out the housing market.

The government shutdown is going have serious consequences, and if it rolls into the debt ceiling battle, you can be certain that we are all going to be seriously screwed very quickly.

That's not exactly true. Our GDP to debt ratio was worse at the end of World War II and we did a decent job of paying it down until Reagan was elected President. However, a lot of the blame should also go on Nixon for closing the gold window and removing the incentives for the government to keep spending in check. The result is what we have today.

The real problem is that we don't have the gumption to start paying the debt down. We could do it, but won't. Instead, we will just keep digging the hole deeper and deeper.

At some point in the future, it will likely come to one of two scenarios:

1) Massive runaway inflation -- think Zimbabwe.

2) Default on the debt -- just refuse to pay it.

I would bet that the result will be inflation. The best I can hope is that we can hold it off until I'm no longer around to suffer through it.