US Government Shutdown Mega-Thread

[bush_cheney2004]

So the last two shutdowns were just as inconsequential as the rest?

Obviously....look how it ended, just as before. I think I reported not getting paid as an active member of the U.S. military back in the early 80's (Shutdown #8), so I am no stranger to federal shutdowns on a personal level. The end and start of the U.S. fiscal year and budget allocations by Congress always have some drama, even without an official shutdown.

[eyeball]

Easy to say just as before now but what if it had ended the other way...crickets would have chirped just like all the other times too?

[bush_cheney2004]

Easy to say just as before now but what if it had ended the other way...crickets would have chirped just like all the other times too?

Yes....Treasury would have prioritized payments to service U.S. debt. The U.S. already experienced across-the-board budget cuts as part of the "sequester" last year. All Congress did was to extend the fight to another day. Life goes on....Canadians can still cross the border to shop !

Edited October 18, 2013 by bush_cheney2004

[Shady]

Obama wins! Obama wins!

U.S. debt jumps a record $328 billion in one day — tops $17 trillion for first time

http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/

Yet in the liberal bizarro world, the group of people that wanted a plan to deal with the debt before raising the debt ceiling again are considered "extremeists" and "radicals."

[Shady]

Yes....Treasury would have prioritized payments to service U.S. debt. The U.S. already experienced across-the-board budget cuts as part of the "sequester" last year. All Congress did was to extend the fight to another day. Life goes on....Canadians can still cross the border to shop !

Exactly. However, it was certainly entertaining listening to the self=proclaimed wizards of smart in the forum, the kimmys, cybers, etc, fret about default. Completely ignorant of the fact that Treasury, by law, is required to prioritize debt payments. So the only way there'd actually be any default, is if the Obama administration refused to follow the law, and deliberately decided not to service the debt.

What's even more amazing is that these wizards of smart, continue, day after day, thread after thread, to blather on about American political topics in which they have no real concept of, other than what they observe as the "truth" from time to time, in one of the many leftists blogs or websites they aquire their information from on a regular basis.

[Guest American Woman]

Yup, the can gets another dent in it as it's kicked down the road one more time and the problem never does get addressed.

It doesn't? Yet life goes on ........... same as everywhere else. "Everywhere else" just doesn't seem to draw the same attention.

[cybercoma]

Obama wins! Obama wins!

U.S. debt jumps a record $328 billion in one day — tops $17 trillion for first time

http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/

Yet in the liberal bizarro world, the group of people that wanted a plan to deal with the debt before raising the debt ceiling again are considered "extremeists" and "radicals."

Don't let the fact that he has more than halved the $1.5 trillion budget deficit he inherited from Bush, despite the massive recession, get in the way of your so-called "facts."

Edited October 19, 2013 by cybercoma

[GostHacked]

Don't let the fact that he has more than halved the $1.5 trillion budget deficit he inherited from Bush, despite the massive recession, get in the way of your so-called "facts."

Not really concerned about budget deficits as much as the total outstanding national debt that keeps going up. Clearing up deficits wont matter much if they cannot get spending under control.

[cybercoma]

Not really concerned about budget deficits as much as the total outstanding national debt that keeps going up. Clearing up deficits wont matter much if they cannot get spending under control.

Reducing deficits is about getting spending under control. They won't reduce the debt until they're running surpluses. Guess what? That's never going to happen with the Republican plan of cutting service AND cutting taxes. They'll reduce their expenses, but also their revenues. The only thing that will save the US is cutting programs and increasing taxes. No one wants to admit that because it's political suicide.

[Wilber]

Reducing deficits is about getting spending under control. They won't reduce the debt until they're running surpluses. Guess what? That's never going to happen with the Republican plan of cutting service AND cutting taxes. They'll reduce their expenses, but also their revenues. The only thing that will save the US is cutting programs and increasing taxes. No one wants to admit that because it's political suicide.

Asking your employer for a pay cut when you can't make your mortgage payments has never been a good policy. But for the past decade and a half, little of this seems to have been about good policy.

[kimmy]

Obama wins! Obama wins!

U.S. debt jumps a record $328 billion in one day — tops $17 trillion for first time

http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/

Yet in the liberal bizarro world, the group of people that wanted a plan to deal with the debt before raising the debt ceiling again are considered "extremeists" and "radicals."

The debt ceiling showdown was never about the debt, it was entirely about the ACA. The Republicans were happy to fund everything, in exchange for concessions on Obamacare. Trying to spin it to appear as if it was a noble quest against the debt is revisionism.

Exactly. However, it was certainly entertaining listening to the self=proclaimed wizards of smart in the forum, the kimmys, cybers, etc, fret about default. Completely ignorant of the fact that Treasury, by law, is required to prioritize debt payments. So the only way there'd actually be any default, is if the Obama administration refused to follow the law, and deliberately decided not to service the debt.

What's even more amazing is that these wizards of smart, continue, day after day, thread after thread, to blather on about American political topics in which they have no real concept of, other than what they observe as the "truth" from time to time, in one of the many leftists blogs or websites they aquire their information from on a regular basis.

First off, Shady, it's not "self-proclaimed wizards of smart." It's "self-proclaimed wizards of cool". Please, get it right.

And second, it's fine and well to say that there is a law saying that the debt holders have first dibs on getting paid. And? Your point? October 17 was the estimated date at which they would have run out of funds with which to make those payments. Yes, there was going to be a default if there was no agreement. No, the law you cite doesn't actually say otherwise. Yes, a default would have been a big deal.

-k

[bush_cheney2004]

Yes, there was going to be a default if there was no agreement. No, the law you cite doesn't actually say otherwise. Yes, a default would have been a big deal.

No, there would not have been a "default" on Oct 17, as Treasury would just prioritize debt payments over other government outlays.

[Wilber]

No, there would not have been a "default" on Oct 17, as Treasury would just prioritize debt payments over other government outlays.

When you consider federal government spending is over 20% of GDP, it would be quite a big deal, but I agree it wouldn't automatically mean default.

[bush_cheney2004]

When you consider federal government spending is over 20% of GDP, it would be quite a big deal, but I agree it wouldn't automatically mean default.

OK, that's all I'm sayin'. The fake drama and politics of a "DEFAULT" was played out last time, and of course it didn't happen then either. It would be more like a gradual decline from the status quo.

[kimmy]

Here's an analysis of the premise that the government could go on without defaulting by paying just interest on the debt while delaying other payments.

It rests on questions like whether there's enough gas in the tank on days when a lot of obligations come due, whether there's any practical way to differentiate which of the millions of transactions per day must be paid and which ones could be delayed, and what the ultimate effect of all of this would have on future revenues.

On a theoretical level, it might be possible to just pay interest on the national debt, while delaying payments to others, and thus avoid an actual default on the national debt. But the Treasury Department has argued it is not actually possible to pick and choose, and that instead it could only delay payments.

Moreover, the impact on Wall Street is all but impossible to predict, as a default on some payments might be viewed as an actual default on the debt. The Fact Checker used to cover Wall Street, and can attest that the image is often more important than the reality.

Pretty shaky.

-k

[bush_cheney2004]

Pretty shaky.

Agreed...any claim that the US would go into default on 10/17 was pretty shaky. Thanks for playing.

[Wilber]

Agreed...any claim that the US would go into default on 10/17 was pretty shaky. Thanks for playing.

Default on what? It seems it would come down to choosing which bills you are not going to pay which in itself a default.

[bush_cheney2004]

Default on what? It seems it would come down to choosing which bills you are not going to pay which in itself a default.

No....not in the real world of T-bills and treasury notes. If the U.S. Treasury fails to send me an income tax return on time it is not considered to be in default for purposes of domestic and international borrowing. That's just more game playing.

U.S. debt payments are still quite manageable as a percentage of the federal budget if other discretionary and non-discretionary spending is suspended or curtailed.

One member here claims that the U.S. has been bankrupt/in default since 1971's "Nixon shock". It's a fun game to play while the U.S. just keeps on spending with borrowed money. Funny that people and nations would continue buying U.S. debt if it was "bankrupt" or "in default".

[Wilber]

Sounds so simple, so why are the Republicans so sweaty about the national debt. Sounds like it is no big deal.

[bush_cheney2004]

Sounds so simple, so why are the Republicans so sweaty about the national debt. Sounds like it is no big deal.

Same reasons some Canadians get so sweaty about "free" health care...I guess.

[cybercoma]

Same reasons some Canadians get so sweaty about "free" health care...I guess.

Try to stay on topic. This is the US Politics section after all.

[Moonlight Graham]

It doesn't? Yet life goes on ........... same as everywhere else. "Everywhere else" just doesn't seem to draw the same attention.

That's because the US is the biggest economy in the world. But when the poop hits the fan in ie: Greece or Iceland, it does get international attention.

The US debt problem is massive international security and economic issue that affects virtually everyone in the world.

[August1991]

Much of it would probably breath a huge sigh of relief.

As an Australian PM once said about the possibility of the US removing itself from world affairs, "Be careful what you wish for because you may just get it."

It doesn't? Yet life goes on ........... same as everywhere else. "Everywhere else" just doesn't seem to draw the same attention.

Life goes on... and then it doesn't. Markets cope with change much better than governments. When the State changes, it is more often than not a radical change.

OK, that's all I'm sayin'. The fake drama and politics of a "DEFAULT" was played out last time, and of course it didn't happen then either. It would be more like a gradual decline from the status quo.

Americans are too use to market changes. They haven't really experienced a change of State. IMV, people want the State to intervene because people dislike uncertainty and the State (politicians, the King's court) offer predictability. But uncertainty and risk are facts of life: IMHO, better the daily market changes, even dramatic, than the once in a lifetime State revolution.

If I must deal with the earth below moving, I'd rather deal with the occasional tremor than have "stability" until the accumulated change appears as an earthquake.

Edited October 20, 2013 by August1991

[August1991]

U.S. debt payments are still quite manageable as a percentage of the federal budget if other discretionary and non-discretionary spending is suspended or curtailed.

I agree. US federal government debt at 100% of GDP or more is sustainable. It's not the size of the debt but its change. The State becomes an unsustainable Ponzi scheme when its debt is growing faster than GDP growth - and that's been the situation of the US for over 10 years.

At heart, Americans want generous Social Security, Medicare and a strong military but they are not prepared to pay the taxes for this. Both Bush Jnr (pharmacare) and Obama (ACA) have added to these entitlements. Bush Jnr got the US military involved (rightly or wrongly) in foreign wars. Obama has barely made a dent in cutting military spending.

In simple terms, this level of US federal government spending - given the political will to impose taxes - is not sustainable.

=====

Let me compare to Canada. Paul Martin raised the CPP/RRQ contribution to 10% of earnings and Harper raised the age of entitlement to 67. Mulroney brought in a comprehensive federal sales tax. (CPP in Canada is not as generous as US social security. US medicare is arguably more generous than Canada's health system for Canadians over 65.)

I simply don't see any US federal politican with the ability to do what Mulroney, Martin and Harper did.

IOW, the US government offers its seniors generous programmes but no US politician is willing to curtail these programmes, or impose higher taxes/contributions to pay for them.

Unlike Greece, the US has its own currency - and it has an expensive military. Hence, IMHO, one of two things will happen (and possibly both) in the medium to long term: the US military will become smaller and the US dollar will lose value.

Edited October 20, 2013 by August1991

[August1991]

Don't let the fact that he has more than halved the $1.5 trillion budget deficit he inherited from Bush, despite the massive recession, get in the way of your so-called "facts."

Compare comparables. When Obama arrived in power, the US economy (and US federal government receipts) were at a low point after the collapse of the housing bubble. Since then, the economy has improved and the federal government tax receipts have increased.

Yet, you make a good point. Rightly IMV, the US Fed printed massive amounts of dollars in 2008-09 and its government ran a deficit. I have no problem with such "short run" imbalances.

It is the long run imbalance of generous social programmes, a large military and politicians unable to get elected if they want to curtail entitlements or raise taxes. Too many Republican voters believe that they are entitled to Social Security and Medicare because they "paid into it". Too many Democrats believe somebody else should pay - or the US is wasting money on its military.

Edited October 20, 2013 by August1991