Opinions on the U.S. federal government shutdown

[efoote868]

A pox on both chambers of congress, as well as the administration. The ruling class needs thrown out, this is why we need term limits.

[EricH]

A plague a' both your houses! (Romeo and Juliet--I forget who said it as he was dying.)

I think Shakespeare had it right, only a few centuries early.

[IKE]

A quick comment on debt:
Often the analogy of Government debt is made towards "Credit Card" debt. My Money Blog gives the example I have been seeing trolling around:
http://www.mymoneyblog.com/us-budget...old-level.html

It basically comapres IRS revenue to a personal income of $20K, and the US national debt to a $142K credit card balance.

If instead, you look at the debt as structural, say a home loan (which is debt as well), suddenly you have a much better scale and understanding. $142K total debt would be similar to a $130K home loan, $10K car loan, and $2K of credit card debt.
Yes, spending $36k/year while only bringing in $20K/year is probably not a good thing, but if you are in a growth model (like young folks buying their first home), then taking on debt can be a reasonable course of action. This to again put it at a persoanl level, it would be akin to taking care of your expenses, plus taking out a home loan (say new roof or furnace or ...), plus a fair amount of non-essential spending (trip, dining out, or...). While this may not be the way many keep there budget, it is not a terribly uncommon early career lifestyle. The base assumption there is that you are in a growth phase of your income, which in general US GDP/Incomes are on the rise. Following this model though only works out in the long run if you have a plan for the long term (retirement and paying down debt).

Much like home & car loans were figured out to generally be a good thing for many, running some level of national debt was figured out by economists to boost economic growth. While the principle is fairly sound, the devil is in the details that are practiced. Taking on too much debt at too high a rate can cause run-away debt that will ultimately end in a bankruptcy (think taking out a high interest loan to pay minimums on credit cards). Taking on "smart debt" like a $10K home loan to ensure to stop a leaky roof that could turn your $200K home into a $50K home due to mold and water damage... On a more micro scale, it might be using a credit card to fill the tank of your car instead of abandoning it when the gas tank is empty (I have driven cars where filling the gas tank increased teh value of the car by about 30% and thus this may not have been a bad strategy ).

Back on topic:

In my analogy, the "US Gov" could be looked at as a young married couple that a while back agreed to buy a house and a couple of cars and has a baby on the way and is fighting about how to handle their debt. One spouse is arguing for austerity or bankruptcy, while the other is suggesting taking out a line of home equity credit to add on a nursery (and won't pay bills until there is an agreement)... There needs to be a real discussion, and there is quite a difference in opinion.
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As for the workers not working and the "lucky governement job", many of those took a 20% pay cut this summer due to sequestration. Some had to dig into their savings to help make up the deltas due to those "temprary cuts". Now they are not allowed to work. The back pay will help when it comes, but if this goes on too long, many could get a credit hit as they have already spent some of their emergency fund on the summers lower revenue.

[efoote868]

Both the example and your analogy ignore about 120 trillion in unfunded liabilities... Replace the 140k loan with a 1.2m loan and there is plenty to worry about.

[IKE]

Originally Posted by efoote868

Both the example and your analogy ignore about 120 trillion in unfunded liabilities... Replace the 140k loan with a 1.2m loan and there is plenty to worry about.

I am assume you are referencing a figure or "math" similar to this analysis:
http://nypost.com/2011/06/26/120-tri...-nations-debt/

Very interesting balance sheet the person chooses to keep. I think that using his "math", I am 1.2M in debt. of course a lot of those "debts" are taking my retirements costs into consideration which just happens to target around 1.2M in order to keep my current standard of living for the future...

[Lil' Lavery]

Originally Posted by efoote868

A pox on both chambers of congress, as well as the administration. The ruling class needs thrown out, this is why we need term limits.

To place symmetrical blame when the actions are assymetrical is rather flawed, don't you think? Frustration with the system leads to apathy. Apathy, in turn, enables fringe powers to control a larger portion of those who are politically active (both in terms of voting and non-voting political action). You're playing right into the hand of the fringe powers at play here.

[Invictus3593]

Originally Posted by Tristan Lall

I'm not sure what you mean by this. Could you explain in more detail?

Here you go!

[Madison]

Originally Posted by Invictus3593

Here you go!

It's just that easy. This outcome certainly won't have any devastating consequences at all, really, and it's a far better solution than behaving like reasonable adults and managing our spending in a professional, measured way.

I'm sold.

[Lil' Lavery]

Originally Posted by Madison

It's just that easy. This outcome certainly won't have any devastating consequences at all, really, and it's a far better solution than behaving like reasonable adults and managing our spending in a professional, measured way.

I'm sold.

To quote the article.

Most people will probably complain about one or more of the cuts proposed here. That is to be expected. If you didn’t notice, NASA and the Departments of Commerce and Energy were completely eliminated. Deep cuts were made to some other departments (Education, EPA, Agriculture, and HUD). Welfare spending was reduced.

I'm not sold. I'm not even close to sold. He also eliminated any spending on the Affordable Care Act (aka, he gave in to the Tea Party faction). More so, the author doesn't even understand what the debt ceiling is. To once again quote the article.

Having established that the government could continue to operate without an increase in the debt ceiling, let’s also make clear the opposite position. President Obama has repeatedly claimed in the past few weeks that raising the debt ceiling does not increase the national debt. He says it is just a necessary step so the government can pay the bills Congress has already voted to incur. This is not true.

Well, contrary to Mr. Dorfman, it is true. The debt limit does not authorize higher future debt, but rather allows the US to meet existing payment obligations. Dont' believe me, just look at the US Treasury website. Whether or not the US Treasury defaults on its debt payments, once the "extraordinary meansures" are exhausted, without any legal authorization to prioritize certain payments over others, the US Treasury would indeed have to delay payments. With each passing week, the US would come closer and closer to defaulting on payments and federal employees would once again find themselves in a situation where they're waiting on back pay.

The author completely ignores how reaching the debt ceiling would impact the financial markets (which have been characterized as as bad as the "Great Recession") and continuing damage to the United States' credit rating.

Beyond all this, his closing line about comparing the US Government to an American family's budget is one that's often trumpeted, but has little semblance to reality. It's a line that's really easy to sell, but the truth is far more complicated.
http://jaredbernsteinblog.com/family...rnment-budget/
http://desertbeacon.wordpress.com/20...-faulty-logic/

Let's call the push for a "balanced budget" what it really is. Austerity.

[Madison]

Originally Posted by Lil' Lavery

I'm not sold. I'm not even close to sold. He also eliminated any spending on the Affordable Care Act (aka, he gave in to the Tea Party faction).

I'm not sold either. I was being facetious. Honestly, I think it's a really stupid idea that is ridiculous on its face and I'm dumbfounded as to how anyone could propose it as a viable solution for the problem our government is currently facing.

[efoote868]

Originally Posted by Lil' Lavery

To place symmetrical blame when the actions are assymetrical is rather flawed, don't you think?

Not really, because you're assuming there exists some politician that doesn't share fault.

You can try to blame the "other side," but I can guarantee that about half of America will disagree with you.

[Lil' Lavery]

Originally Posted by Madison

I'm not sold either. I was being facetious. Honestly, I think it's a really stupid idea that is ridiculous on its face and I'm dumbfounded as to how anyone could propose it as a viable solution for the problem our government is currently facing.

Forgive me. Read your post too quickly.

Originally Posted by efoote868

Not really, because you're assuming there exists some politician that doesn't share fault.

You can try to blame the "other side," but I can guarantee that about half of America will disagree with you.

No, I'm stating that not all the politicians share the same amount of fault. There are certainly groups here who are more at fault than others, and to put a general blame on all of them does nothing to solve the problem.

It's not about blaming the "other side," so much as creating an educated viewpoint of the series of events that led up to this point. When a failure to pass a budget results in a government shutdown, the burden of proof should be clearly placed upon the obstructionist group to validate their actions.

[efoote868]

Originally Posted by Lil' Lavery

No, I'm stating that not all the politicians share the same amount of fault. There are certainly groups here who are more at fault than others, and to put a general blame on all of them does nothing to solve the problem.

It's not about blaming the "other side," so much as creating an educated viewpoint of the series of events that led up to this point. When a failure to pass a budget results in a government shutdown, the burden of proof should be clearly placed upon the obstructionist group to validate their actions.

I'd wager the group you consider "more at fault" would be based on your ideology, the same way it would influence your interpretation of the events that led up to this point.

My point is that I'm upset that the House isn't working with the Senate, and I'm upset the administration is making the shutdown more painful than necessary. It's all politics, and I blame them for being political about this.

[EricH]

Originally Posted by efoote868

I'd wager the group you consider "more at fault" would be based on your ideology, the same way it would influence your interpretation of the events that led up to this point.

I'm with ya there. There's plenty of blame to be spread around, to all parties involved (including the voters for electing the particular representatives involved). Who gets the most is an open question that might not be answered until 2014.

[synth3tk]

Originally Posted by EricH

(including the voters for electing the particular representatives involved).

That's a can of worms right there.

Yes, I'll take one well-informed nation of voters for $13-trillion, Alex.