government shut down

[Callie Del Noire]

What's the Caucasus got to do with the US?

http://www.thefreedictionary.com/caucus

I suspect there was a typo or autocorrect snafu

[Dashenka]

Okay... got me all confused :D

[Retribution]

I generally vote Republican but will say that I think the Republicans are indeed the cause of this mess. I think we need to look at spending, but Obama Care is the law so deal with it. Oddly, as I researched my local Rep. on this issue he sounds a lot like me. He is a Republican of conservative but not Tea Party bent. As I applied Google there were articles about him catching hell from the far right for saying his side of the aisle should not be tying ACA up in all of this. That he thinks it is a bad idea. Then it took some more digging but I found on CNN a member by member vote on the House bill that extended the debt ceiling but defunded ACA. He fell into line with his party leadership and voted yes.

Hmmmm, now I got to do some soul searching next election. I generally like how the guy votes but this irks me. Do I vote for him again despite the fact that I do not like this vote? If I do so am I putting in someone who I do not like their vote more often? Is it simply a choice come next election of who I disagree with less? Also this fellow is in a district that he is not likely to lose. If I vote against him because of this vote I possibly elect someone that say will be for more gun control a near and dear issue to me. I can always count on the current guy to vote against such things which is something that is very important to me as I do not like gun control. That is a whole other ball of wax but I used it as an example to illustrate my point. What it comes down to is I guess I feel like I’m left voting for who sucks less.

I also am appreciative of his position and it is not an admirable one.  He has gone on record saying this is a bad idea. He wants to extend the debt ceiling. So does he vote “No” on the House leadership’s bill and essentially vote not to extend it. Or if he votes “Yes” which is what he did, then he votes for defunding ACA which is what this all comes down to. He has gone on record as saying he does not like the ACA and thinks it’s a bad law, but that it has passed so let’s move on now. If he had voted “No” his own party leadership would cut him loose to drift and he possibly would not have gotten some others things done that he is in favor of. It is all very complicated and gets real muddy when politics become involved. And few will do the digging I did on just what he said and how he voted they will look at black white or in this case yes/no.  In fact he so much as says we can only dig in our heels so long on this then we got a looser.

So yeah I got to do some soul searching come next vote. I do not like the government shutdown at all. So I do not like my Rep’s vote. But then when I look at other things on the table I like how he goes more often than not. Last election for governor I voted for a fellow I really did not like but there was one sticking issue I was with him on and it was the big one in that election. So I went against my normal trend and the gov now makes me cringe every time he comes up with some more BS. But I voted for him over that one issue. LoL it gets very frustrating.

[Oniya]

I'd look at how he's approached the vote.  The ones standing up there on the soapbox screaming along with Boehner (I am so tempted to auto-correct his name) are part of the problem.  The ones that favor negotiating are part of the solution.  The ones that simply drift with the prevailing currents are part of the precipitate.

[Callie Del Noire]

I tend to vote republican on the local level but of the last 8 years I'm less and less what the party supports. It is annoying to see folks revise history to their benefit like the local GOP does. ("Ronnie Reagan would have supported less taxes like we do!" Ect).

We are wasting time, money and effort on one fringe group who has blackmailed us into a lower credit rating, engaged in games of brinksmanship and steadfastly refuses to even discuss compromise while electing officials who don't honor their promises to the public and walk in lockstep with special interests like Grover Norguist and the Koch brothers.

Reagan and Bush I weren't perfect but they did a mic of things to build a surplus. One that we pissed away on wars, good deals for small groups and bailing out a bunch of crooks who nearly collapsed the global economy while doing nothing to punish them or reform the system so it can't happen to us again.

We let our eyes be clouded by social issues while K street lobbyists do the Potomac two step with both parties leadership. The Tea party could have been an agent of reform but got subverted by corporate and religious interests. The Occupy movement could have been as well but never built a platform or found a focus.

The two party system doesn't work on the National level anymore. I wish sometimes we had to build a consensus to run the government because then our leaders would learn how the fucking words 'compromise' and 'cooperate' work.

I'm done. I'm going out for two packs of hard cider, a pizza and no more damn news. See you guys tomorrow when I'm not so damn pissed I might have lost ANOTHER damn job to Tea Party extortion tactics.

[Valthazar]

Did we really think our debt was going to rise and rise forever?  Ultimately, there was going to come a point in time when one political party would refuse to negotiate more programs financed in debt.

If anything, I'm hoping this government shutdown will act as a sign that the US needs to be a bit more frugal to have any semblance of stability.

[Retribution]

I'd look at how he's approached the vote.  The ones standing up there on the soapbox screaming along with Boehner (I am so tempted to auto-correct his name) are part of the problem.  The ones that favor negotiating are part of the solution.  The ones that simply drift with the prevailing currents are part of the precipitate.

I researched that and there are many places he says this is a politically indefeasible situation. It is in essence a looser sooner or later when veterans do not get paid, medicade, social security, so on. The tea part is busting his balls over that. He also says he would rather "expose the law" when it comes to ACA than what we have now.

Now having said that he is also pretty much in Valthazar's camp in that he says we cannot keep spending like a drunken sailor on shore leave. Well not those words but it is implied  :-) I agree I explained the issues in my home state in an earlier post. You can only rob Peter to pay Paul so long before there is a reckoning. So my Rep does not like the ACA he thinks it is on shaky financial footing, but though he voted with the current crop of his party that made this mess he would rather go at reform differently from what I read.

So yeah I am inclined to cut the guy some slack. My personal opinion on ACA is it will be a money pit and I do not think it will fix our glaring problems with health care. But hey it is the law lets deal with it.

[Ebb]

Did we really think our debt was going to rise and rise forever?  Ultimately, there was going to come a point in time when one political party would refuse to negotiate more programs financed in debt.

If anything, I'm hoping this government shutdown will act as a sign that the US needs to be a bit more frugal to have any semblance of stability.

You may be unaware of the fact that the federal budget deficit has been shrinking for the last three years:
http://www.bloomberg.com/news/2013-08-06/deficit-shrinks-to-5-7-of-gdp-as-debt-ceiling-no-vote-risks-all.html

You may also be unaware that the CBO (Congressional Budget Office, pretty much the nonpartisan "buck stops here" desk for all revenue projections) has determined that repealing Obamacare will add $109 Billion to the federal budget deficit over the 2013-2022 period. That's right -- repealing Obamacare will increase the federal debt, not decrease it.

It is true that there is still a debt problem, no matter how you slice it. Efforts to reduce this debt are to be applauded. What the House Republicans are doing right now does not address this in any way. It is entirely a political act.

In fact, the mere act of shutting down the government has a measurable negative effect on the economy. If they continue this tactic through October 17, causing the debt ceiling to be breached, then there is a very real possibility of crashing the world economy. That's not hyperbole.


The time to negotiate expenditures is when those expenditures are allocated, just like the time to decide whether you can afford to order the steak is before you order your food. We're now at the point where we're paying for the meal we've already ordered and eaten. Refusing to pay the check now kinda sorta means that restaurants stop serving us food.

[Dashenka]

Also read somewhere that the US national debt if spread out over the population is lower than a country than the Netherlands. Meaning the Netherlands has a higher debt per capita than the US, so you're not doing too badly.

And as I said before, money makes money. In order for the economy to grow, the government has to invest in the market and with no money in the bank, they'll have to take out loans. I don't think that debt is a big issue (yet). Yes it's a big number but nobody's afraid of the US going bankrupt (yet).

[Deamonbane]

[Oniya]

And as I said before, money makes money. In order for the economy to grow, the government has to invest in the market and with no money in the bank, they'll have to take out loans. I don't think that debt is a big issue (yet). Yes it's a big number but nobody's afraid of the US going bankrupt (yet).

To refine this a little more, moving money makes money.  In order to get more money in one place, it has to be moved from somewhere.  Goods get purchased, imports, exports, research, technology - the money needs to move.  That actually means that at any given time, most countries owe money to some other countries.  That dynamic helps fuel international trade.  Yes, the US owes money to other countries - and there are probably other countries that owe money to the US.  Not to mention, all the Treasury bills and such are debts that the US Government owes to its own citizens.

[Valthazar]

You may be unaware of the fact that the federal budget deficit has been shrinking for the last three years:
http://www.bloomberg.com/news/2013-08-06/deficit-shrinks-to-5-7-of-gdp-as-debt-ceiling-no-vote-risks-all.html

I think this is referring to debt as compared to GDP.  The net debt is still increasing at a tremendous pace, and these discussions about budget cuts are essentially about reducing the amount of debt incurred - not a real road map towards actually cutting the net deficit.

http://www.usdebtclock.org/

You are acting as if the Republicans wanted to shut the government down - which is a very extreme claim to make.  No one wants to see the government shut down, and as has been discussed in this thread, this is a symptom of a failure of both political parties.  The shutdown helps no one, and as you pointed out, it is costing us money each week this continues.

As far as I am concerned, the world economy is already screwed. 

In order for the economy to grow, the government has to invest in the market and with no money in the bank, they'll have to take out loans. I don't think that debt is a big issue (yet). Yes it's a big number but nobody's afraid of the US going bankrupt (yet).

The fact that many people in this discussion have no qualms about hyperinflation, and supporting a government that isn't empirically reducing its debt in a positive direction, is evidence enough that we are in very bad shape.  All of our savings are steadily losing value by almost 1.5%.

edit: corrected the rate

[Ali Z]

*Adds a little levity to the debate.*

http://www.youtube.com/watch?v=CeOZ1xzWqjE

[Ebb]

I think this is referring to debt as compared to GDP.  The net debt is still increasing at a tremendous pace, and these discussions about budget cuts are essentially about reducing the amount of debt incurred - not a real road map towards actually cutting the net deficit.

http://www.usdebtclock.org/

Yes, this is looking at debt as a percentage of GDP. This is by far the most typical way of talking about debt, much like how we automatically adjust numbers for inflation when comparing dollar amounts from two different years. It doesn't make much sense to look at debt in the absolute sense, since "how much it hurts us" depends entirely on how big our economy is at the time. If I sign a $1,000,000 mortgage, I'm screwed. If Warren Buffet signs it, it's pocket change.

You are acting as if the Republicans wanted to shut the government down - which is a very extreme claim to make.  No one wants to see the government shut down, and as has been discussed in this thread, this is a symptom of a failure of both political parties.  The shutdown helps no one, and as you pointed out, it is costing us money each week this continues.

As far as I am concerned, the world economy is already screwed. 

I don't think even the most hard-right Tea Party members want us to default on the debt. I do think that they're willing to march us up to the brink of that in order to negotiate for what they want, which is to repeal Obamacare. Moreover, I feel that if someone fumbles the ball and we get to October 17th without a budget being passed then the President will simply unilaterally raise the debt ceiling on his own, which will probably spark a constitutional fight but will at least preserve the economy in the meantime.

I also don't think the world economy is screwed. In fact it's recovering slowly from the recession, taken as a whole.

Here's my main point: the current government shutdown does not represent a failure of both political parties. Assigning equal blame in this case is an error. I've done my best to explain that in this thread, and I haven't seen any counterarguments other than vague "screw them both" (not an actual quote) sentiments. If there's one thing I'd like readers of this thread to walk away with, it's that the current government shutdown is a result of the actions of the far right faction of the Republican party, in a politically motivated act that has very little, if anything, to do with debt reduction.

[Valthazar]

Here's my main point: the current government shutdown does not represent a failure of both political parties. Assigning equal blame in this case is an error. I've done my best to explain that in this thread, and I haven't seen any counterarguments other than vague "screw them both" (not an actual quote) sentiments. If there's one thing I'd like readers of this thread to walk away with, it's that the current government shutdown is a result of the actions of the far right faction of the Republican party, in a politically motivated act that has very little, if anything, to do with debt reduction.

This is your opinion, and you are entitled to it.  But it is all a matter of perspective.  For example, I could play devil's advocate, and suggest that the Democrats are equally to blame for refusing to accept any semblance of a budget deal before a deadline.  In other words, by even allowing a government shutdown to enter their minds as an option, and not doing "something" to reach at least some sort of a budget compromise (even one they may consider inferior), they essentially betrayed their constituents - as well as the American people.  I think all of us would agree that an inferior budget (in your eyes, or anyone's eyes), is better than a shut down.

This is the reason I say that both political parties have leaders who fundamentally are out of touch with the American people when it comes to these matters.

[Vekseid]

Did we really think our debt was going to rise and rise forever?  Ultimately, there was going to come a point in time when one political party would refuse to negotiate more programs financed in debt.

If anything, I'm hoping this government shutdown will act as a sign that the US needs to be a bit more frugal to have any semblance of stability.

I swear I need to add a BBCode that pulls the current treasury yield every time someone brings this nonsense up.

When investors are more confident in getting a 1.5-3% yield then they are in getting that return from the economy, debt is not this country's problem.

[Bloodied Porcelain]

I swear I need to add a BBCode that pulls the current treasury yield every time someone brings this nonsense up.

DOOO EEEET!

DOO EET NAO!

[Kythia]

I swear I need to add a BBCode that pulls the current treasury yield every time someone brings this nonsense up.

When investors are more confident in getting a 1.5-3% yield then they are in getting that return from the economy, debt is not this country's problem.

Hmmm, I think that's both a little simplistic and a little complex, simultaneously.  Somehow.

My issue with it is that while sure US Treasury bonds are doing all right-ish, the US's problems are precisely what the people of the US think they are.  I'm not even over there and I hear all of this about how debt is crippling the country, selling the red white and blue to the Chinese, etc etc etc.  Lord alone knows what it must be like over there.

And politicians want to be seen to be doing something.  And arguments against debt seem so persuasive, emotionally.  "It's just like a household, you can't spend more than you have coming in."  Forget the fact that, you know, it's not.

So I think there's a case to be made that debt, or the fear of debt, is a major US problem at the moment.  Politicians will work to alleviate it so they can point triumphantly and cause massive problems in doing so. 

While I agree with you that looked at objectively, as investors do, US debt isn't a crucial issue, I think saying its not the problem ignores how easily and readily it could become a very serious problem as people panic to rectify it.

I get that wasn't entirely the point you were making, and your comment was mired in frustration about people crying about it all the time, but sadly politics makes people immune to maths and just pointing to the treasury yields isn't going to change that.

[Oniya]

Just to clarify, you get that 3.72% (as of today) if you're willing to leave your money in the bond for 30 years.  Used to be that you could get better than that per annum on a regular savings account.

http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

[Valthazar]

While I agree with you that looked at objectively, as investors do, US debt isn't a crucial issue, I think saying its not the problem ignores how easily and readily it could become a very serious problem as people panic to rectify it.

I get that wasn't entirely the point you were making, and your comment was mired in frustration about people crying about it all the time, but sadly politics makes people immune to maths and just pointing to the treasury yields isn't going to change that.

I'm an investor, and I don't think it is objective to suggest that the US debt isn't a crucial issue.  Treasury bonds are the gold standard, and a lot of people use those interest rates as a measure of the health of the economy.  While conventional wisdom suggests that government bonds are 100% safe, and that interest and principal will be guaranteed to be paid on time, an increasing number of investors feel that the US will not be able to honor these contracts over the long-term  - due to debt obligations.  No one can predict the future, but the sterling credit rating of the US is increasingly coming under scrutiny.

[Shjade]

For example, I could play devil's advocate, and suggest that the Democrats are equally to blame for refusing to accept any semblance of a budget deal before a deadline.  In other words, by even allowing a government shutdown to enter their minds as an option, and not doing "something" to reach at least some sort of a budget compromise (even one they may consider inferior), they essentially betrayed their constituents - as well as the American people.  I think all of us would agree that an inferior budget (in your eyes, or anyone's eyes), is better than a shut down.

I wouldn't, not under these circumstances. It's not about the budget, it's about precedent. If the Democrats cave to this tactic, our political system is no longer run by reasonable parties (not that I'm necessarily saying it is now), it's run by whoever is the most willing to do crazy shit to force the other side to cave regardless of consequences.

Suddenly the best candidates for public office are the nation's best poker players.

[Kythia]

I'm an investor, and I don't think it is objective to suggest that the US debt isn't a crucial issue.  Treasury bonds are the gold standard, and a lot of people use those interest rates as a measure of the health of the economy.  While conventional wisdom suggests that government bonds are 100% safe, and that interest and principal will be guaranteed to be paid on time, an increasing number of investors feel that the US will not be able to honor these contracts over the long-term  - due to debt obligations.  No one can predict the future, but the sterling credit rating of the US is increasingly coming under scrutiny.

If that's the case, you're something of a lone voice in the wilderness there.  While sure they took a dip recently, yield rates have been rising steadily all year.  I hope you make a killing, but your opinion doesn't seem to be the general consensus.

[gaggedLouise]

Civil Disobedience: WW2 veterans, some of them in wheelchairs, storm the WW2 monument in the capital (with video)

Me like.

[Valthazar]

If that's the case, you're something of a lone voice in the wilderness there.  While sure they took a dip recently, yield rates have been rising steadily all year.  I hope you make a killing, but your opinion doesn't seem to be the general consensus.

You're right, it isn't the general consensus, because almost every economics class teaches that "Treasury Bonds are guaranteed investments" - and many people (even professional finance managers) throw money into these like it's free money.

This is certainly very true if one plans to hold a treasury bond till maturity (assume 30 years).

But when many investors buy treasury bonds, they are not planning to hold it till maturity - and will likely try to sell their treasury bond on the bond market for a profit.  Especially in our current economy, it is very likely that the average person will not be holding a significant amount of money in these bonds for 30 years (since as times get tough, you'll want more cash in hand, in case there is an illness, job loss, etc).  So for example, if you have a treasury bond that pays 5% interest rate, and the prices of food and energy increase, as well as inflation rates - then the overall market interest rate will also rise.  So now, the 5% interest rate on the treasury bond is rather bleak, and the value of the bond will fall.  If you want to sell it, you'll get less than the face value.

That's why it's not wise to view government bonds as knee-jerk automatic returns (unless of course you are confident you won't need that money for the full-length of the bond).

[Kythia]

Errrrm, yeah.  All of that's true but I struggle to see the relevance.

Selling a treasury bond requires a willing buyer.  Just because the initial seller doesn't hold it for the full term makes no difference. It's still held for the full term and the buyer must believe he'll make a profit from it.

You, errrm, you absolutely won't get less than the face value on a bond - you can see resale values here and as you see they're almost all being sold above face value.  Newly issued 30 year treasury bonds are well down but that's hardly unusual.  Other than, pretty consistently above face value.