government shut down

[Valthazar]

For a business in the lower echelons, I can see that.  What I have difficulty stomaching is upper echelon businesses (I'm looking at you, Walmart!) who really don't have to worry about a loss of business any time soon*, trying to figure out how they can keep contributing to Super-PACs that keep certain Congressmen in office despite their track records.  Perhaps corporate taxes need to be staggered the same way that individual taxes are staggered - assuming that they aren't already.

I am also no fan of lobbyists or corporate campaigning.  But 99 percent of all independent enterprises in the country employ fewer than 500 people, and these small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA).  Even a company employing 1000 or 2000 employees would be struggling big time to stay afloat in this economy - which is why I get a little surprised when I hear how with such ease, a lot of people suggest a corporate tax rise as being the knee jerk solution.

http://economics.about.com/od/smallbigbusiness/a/us_business.htm

So, as far as my solution - cut down military expenditures big time, and make other well-thought out budgetary reductions, and reduce taxes on the middle class, as well as small businesses, and gradually taper back on the treasury bond buybacks (which we all know is going to end at some point).  Personally, I have concerns regarding ACA economically, but it is already law - and we need to ease the pressure on businesses to accommodate to this new law, before increasing their taxes even more.

[gaggedLouise]

What I was aiming to point out was: an industrialized, advanced country (and one that relies massively on trade with other countries, both in currencies, finance and real goods) has low chances of just 'starving itself out' of a lengthy dip by putting all public spending on an austerity cure. So many busineses rely on the public and the government as the big customers that cutting down sharp on the budget would also contract the corporate economy. And it robs lots of ordinary citizens of their purchase power too, that's something several people have pointed out in this thread from their own recent experience - that in turn pulls down the amount of goods companies might want to produce, and pulls down taxes. In turn, feeds a further contraction.

What do you mean by, "less politically difficult to pump more dollars into the system than to try to create new jobs at home?"

The government doesn't create jobs, private businesses do.  I can tell you for a fact that if already hiring-timid businesses are stunned next year with a higher corporate tax, and already an increasing minimum wage, you'll see even more unemployment.  It all comes down to risk management, and a lot of companies are reducing their potential for risks (new hiring) when there are a lot of uncertainties in the business environment.  If you're a business owner, and you need to figure out your projected earnings report for next year with this new healthcare law, reducing in treasury stimulus, and just creeping out a tough recession, wouldn't you also be nervous about adding new hires and the liabilities that go with that?  Sometimes we need to give the economy time to reconfigure itself back to homeostasis.

Yes, but like Oniya, I think this plays out very differently with large companies than with small ones. Starbuck's, Nike, Apple or Walmart are not going to risk any major losses to their business just because of some raised taxes or even efforts to make it harder for them to move U.S.-located jobs overseas.

At one time it was sort of a deliberate political choice to let production and industry jobs go, to make it much easier for companies to relocate those jobs to Asia, or outsource them to companies there. The idea was that countries like the US, the UK or France should be doing finance, fashion design and advanced service jobs - a kind of "industry" that has next to no need for a supply of raw stuffs - not in the country where the company is listed anyway: lots of fashion clothing basics are made in south Asia - tons of metals, engineers and big factories.I think it's getting clearer that was a long-term fallacy. Any economy needs tech industry and food sector jobs, and we need a large amount of jobs that are not supposed to require a university diploma and investing years of advanced studies and training, work sectors that are able to suck up a large part of young people and immigrant people and offer them a sustainable economy and meaningful jobs long before they reach the fine age of twenty-five or thirty.

With that being said, I have always been opposed to any sort of government backed bond buyback or stimulus program.  I agree with Oniya, and sometimes you just have to let the economy struggle before it rises.  My favorite part is how people think we are making an economic recovery based on stock market rises, but its largely due to $85 billion a month thrust into the economy.  Get ready for another market crash in next 2-3 years.  Your idea would be to extract $85 billion per month out of these same Wall Street Companies and firms, and yet expect their performance to be the same?

There are legitimate economic factors at play here, and one cannot simply chalk this up as Republicans being antagonistic, and there needs to be a dialogue where both perspectives are voiced.

In today's economic realms, it seems that it's rarely the guys who made the big mistakes, the key misjudgements prior to a crisis within a business, that end up with a bag of poop and a crippling loss. Look at the banks and mortgages crisis a few years back: the banks and businesses that got hit were not the ones that had really shown bad judgment in key places, it's just that too much of the intoxicated assets had landed with these firms due to a half automated model of decision, sloppy control (though accepted under the table by mid-level bosses: if you want to score you got to place some risky bets) and a fast-lane way of making business. Besides, realy big banks are not allowed to fail: the state decides to pay for them with...yes, taxpayer money, ultimately. We've seen a lot of that in Europe (thankfully less of it where I live, but that's only because Sweden isn't part of the euro currency zone) and some in the U.S. too I believe.

Besides, the 85 million bucks per month that are used for stimulation - I agree they could have been used in a more effective way, but they are not really drawn staright from taxation revenue are they? Not corporate taxation, anyway.

[Valthazar]

I disagree that drastically reducing the military budget overseas will reduce the purchasing power of the ordinary citizen within the United States.

I agree with you that the loss of a manufacturing base is problematic - but the phenomenon of needing a university diploma nowadays is an entirely different issue due to educational inflation, which has already been addressed in this thread.  Even many service-sector jobs today like accountants and salesmen were previously on-the-job trained, but now require diplomas (so that's a totally different issue).

As far as the banks, are you suggesting that it is healthy for the state to support the private banking sector?  I strongly disagree with this, and if anything, the 2008 crisis has shown the inherent problem of a large, unregulated banking sector.  The Frank-Dodd Act was an attempt to prevent a scenario where 'banks are too big to fail' - and regulates the industry much more effectively.  To suggest that it is 'healthy' and 'necessary' for the government to perform such bailouts of cherry-picked private companies (essentially precluding them from bankruptcy) is very surprising for me to hear.

The $85 billion per month is debt-subsidized, and attempting to raise a corresponding $1.02 trillion in tax revenue per year would be economic suicide (as well as ironic, since they would be extracting money from the economy, only to re-inject it back in...). 

[Callie Del Noire]

I disagree that drastically reducing the military budget overseas will reduce the purchasing power of the ordinary citizen within the United States.

I agree with you that the loss of a manufacturing base is problematic - but the phenomenon of needing a university diploma nowadays is an entirely different issue due to educational inflation, which has already been addressed in this thread.  Even many service-sector jobs today like accountants and salesmen were previously on-the-job trained, but now require diplomas (so that's a totally different issue).

As far as the banks, are you suggesting that it is healthy for the state to support the private banking sector?  I strongly disagree with this, and if anything, the 2008 crisis has shown the inherent problem of a large, unregulated banking sector.  The Frank-Dodd Act was an attempt to prevent a scenario where 'banks are too big to fail' - and regulates the industry much more effectively.  To suggest that it is 'healthy' and 'necessary' for the government to perform such bailouts of cherry-picked private companies (essentially precluding them from bankruptcy) is very surprising for me to hear.

The $85 billion per month is debt-subsidized, and attempting to raise a corresponding $1.02 trillion in tax revenue per year would be economic suicide (as well as ironic, since they would be extracting money from the economy, only to re-inject it back in...).

I think, as this is as a layman, that while the Frank-Dodd act is a good start that it would have been a lot better if the 'Glass-Stegall' restoration clause had been added back in.

What disturbs me even more is the continuing lack of accountability in regards to the debacle of 2008. I was wiped out, so were several of my friends and I doubt anyone in the US hasn't heard of someone they know losing their home.  The Savings & Loan crisis of the late 80s/early 90s had DOZENS of bank officers going to prison and something like half a dozen major S&L failures.  There was accountability. From the 2008 bubble burst..there has been an air of 'business as usual' and 'too big to fail' with no moves to prevent that continuing 'too big to fail' foolishness.

To me.. 'Too Big to Fail' = 'Break up into divisional segments' (IE.. Bank American Commerical, Bank American Consumer, ect)

[Dashenka]

I just hope they get their act together. Already made a down payment on my new car due for January. Would hate to have to sue the Italians for not delivering my car because they rely on parts from the US, which is by then a bankrupt nation.

If not for the American people, Mr.Boehner, at least do it for the sake of my new Maserati.

F*cking imbecile politicians...

[Vekseid]

There is a massive difference between default and insolvency.

The US still holds something like a quarter to a third of the world's infrastructure - the total wealth of the country is roughly $150 trillion.

Imagine the richest person on the block being too busy trying to keep his right arm from punching him in the face to even feed himself or wave hello.

It's not a "He's going bankrupt!" situation. It's a "What the fuck is wrong with him!?" situation.

[Dashenka]

What I mean is that we in Europe are finally clawing out of the recession and now we're at risk of falling back into one because some incompetent oafs across the pond can't do politics.

[Oniya]

If not for the American people, Mr.Boehner, at least do it for the sake of my new Maserati.

Is it cynical to think that this kind of appeal might work better?  Well, at least if it was coming from one of their SuperPAC donators.

[Dashenka]

Is it cynical to think that this kind of appeal might work better?  Well, at least if it was coming from one of their SuperPAC donators.

Well they obviously don't care for the American people so I thought I'll try a different approach. Let's see if it works.

[Valthazar]

Vekseid is correct, the government is in trouble, but the fundamentals of most fiscally responsible American companies is still strong.  I wouldn't worry about your Maserati.

Also, I honestly wouldn't worry about a default, all signs recently indicate that this is an unlikely scenario.

[gaggedLouise]

Vekseid is correct, the government is in trouble, but the fundamentals of most fiscally responsible American companies is still strong.  I wouldn't worry about your Maserati.

Also, I honestly wouldn't worry about a default, all signs recently indicate that this is an unlikely scenario.

We'll get to see about it. At this point, after so many failures, I think both Obama, Reid and some leading Reps almost have to send the message to the media that they are cautiously optimistic - if they were just bleakly realistic, and said "No comments until there are solid signs of an approaching deal", it would risk to be seen as the kind of dark prophesy that fulfils itself.

Anyway, if they should find a short-term compromise deal and get it voted in, a day or two before the deadline, but that compromise only holds out for let's say six or eight months with respedct to the debt limit, then you'd get essentially the same circus again in a couple of months time, the same accusations, the same shake-ups, the same gaming of the system. And again. It's just not a credible way to run the budget and spending goals of a nation that is, for better or for worse, the economic number one power in the world.

It's discrediting in the same way as with a (fictional) country where democracy and equal right to vote would be guaranteed by the law and there was a long-standing run of civilian governments, but where it had over time become effectively impossible in many areas to get anything done and enforced unless you provided kickbacks and other favours to the politicians, businessmen and bureaucrats involved. That kind of state would be technically legit and democratic, but it would not be credible to many of its citizens.

[Callie Del Noire]

Vekseid is correct, the government is in trouble, but the fundamentals of most fiscally responsible American companies is still strong.  I wouldn't worry about your Maserati.

Also, I honestly wouldn't worry about a default, all signs recently indicate that this is an unlikely scenario.

Given the conditions that the cessation of the shutdown are under now. (The Majority Party Leader, Cantor, or his appointed stand in are the only ones who can present a proposal to restart the government)

http://www.youtube.com/watch?v=0Jd-iaYLO1A&feature=youtu.be

I think they (the Speaker and Cantor) plan on running us all the way to the cliff and beyond unless they get their way.

[Valthazar]

It seems that people here are simplifying this issue into a, "if they simply go along with Obama and Reid, everything will be okay" attitude.  There are fundamental problems with both the Republican and Democrat approaches.

The reality is that the government is economically jeopardized no matter how you look at it.  Much of the economic 'recovery' that has been heralded since 2008, as cited by job growth figures, declining unemployment rate, and rising stock prices, are largely artificial.  More workers are part-time than full-time - a trend that I believe is likely to continue as the ACA rolls out.  As the number of part-time jobs increase, the unemployment rate seemingly declines, despite an increasing number of people turning to government assistance programs. 

Wall Street had another outstanding day today, but it is out of touch with reality.  Here's an excellent article describing how the stock market today is basically an artificial game for quick money.  Everyone, and I mean everyone, knows that as soon as the federal government stops artificially putting money into the economy, the United States, and the global economy, will be in big trouble.

I'm saying all this because in the grand scheme of things, this Democrat vs. Republican feud is the least of our concerns.  To think that either of these parties is representing sound fiscal policy is truly a joke.  I urge people in this thread to research alternative political and economic views to the dual party system.

[Vekseid]

You haven't advocated any means by which money can be brought into the hands of the spending classes (the bottom 95%) which would actually resolve that, yourself.

[Callie Del Noire]

You haven't advocated any means by which money can be brought into the hands of the spending classes (the bottom 95%) which would actually resolve that, yourself.

True. I personally think we need to start giving breaks to companies that find ways to bring long lasting jobs to the Ud rather than outsourcing. I keep hearing about how the US is now 'only white collar and service industry.' Jobs. I know that's is not true, OLD blue collar industry might be dead but I have seen new manufacturing and distribution models that can and do work in the US. There was a bottle making company in one of my Econ texts that showed that. (I'll have to find it when I get home)

Thing is, we no longer offer incentives for industrial investment, infrastructure development or research & development like we used to. Kevlar, lasers, microcircuits, and a lot more came out of those sort of incentives. And they tapered off after they were killed off.

[gaggedLouise]

The reality is that the government is economically jeopardized no matter how you look at it.  Much of the economic 'recovery' that has been heralded since 2008, as cited by job growth figures, declining unemployment rate, and rising stock prices, are largely artificial.  More workers are part-time than full-time - a trend that I believe is likely to continue as the ACA rolls out.  As the number of part-time jobs increase, the unemployment rate seemingly declines, despite an increasing number of people turning to government assistance programs. 

Wall Street had another outstanding day today, but it is out of touch with reality.  Here's an excellent article describing how the stock market today is basically an artificial game for quick money.  Everyone, and I mean everyone, knows that as soon as the federal government stops artificially putting money into the economy, the United States, and the global economy, will be in big trouble.

I think you could well be right on the money in much of this. If interest rates are allowed up (as they should, in time) and the U.S. were to move away from a state where everything's doped with credits and loans on any kind of instruments or objects you can think of, then is it gonna hurt? Yes. If there is to be more full-time jobs and more long-lasting jobs (and new factories and better railways and roads to serve a growing economy and population)), is it gonna cost lots of money? Yes. Are business journalism, accountability and honest admission of failures in business deals ands business tactics largely a joke as they come through in today's media and public realm? Do the hot guys get off scot free? Yes, yes, it's the same around where I live and from what I hear from the US it does sound as if that's how it is over in New York, too.

But there's no going back to a state of affairs where the state just stood back, in good or bad times, crossed its arms across the chest, and essentially let everything play out according to market rules and the wishes of private market forces, even if it meant that many millions had their means of work and survival washed out at a bad turn. Or if it risked taking down business areas that would be critical to the long-term survival of the nation, or credibility in war, in medical reserach etc. In any modern country the state is much more embroiled with investment, critical education and infrastructure building, providing key incentives to the economy that push it towards new goals and towards better results. (I was going to add "involved with public health and health care" to the list but of course that isn't always true...). I can see where you're coming from, but arguing with that the state is intervening in the economy to try to achieve fair conditions, ecnomic vitality and not getting even more of the population pushed into the street or kicked out of the labour market for many years (or for life), that's a bit like being angry at how some summer days bring rain and grey skies, not all sunshine.

I'm saying all this because in the grand scheme of things, this Democrat vs. Republican feud is the least of our concerns.  To think that either of these parties is representing sound fiscal policy is truly a joke.  I urge people in this thread to research alternative political and economic views to the dual party system.

Many people here would agree that both parties have bought far too much into a wild overgrowth of lobbyism, corporate cronyism, shortsightedness, electionering mentality instead of real politics... and souped-up statistics and spin. And I'd personally agree the two-party system and its media/political PR hangers-on are part of the problem. And that those two parties' upper ranks and their cronies are being firmly shielded from the hazards and breakdowns that politics and business generate in ordinary life, on the ground level.

[Bloodied Porcelain]

Oops. It's already been shared. *snip*

[LunarSage]

I will readily admit that I am way too much of a layman on the subject to follow half of the conversation in here.  I don't know how economics work and I have little clue how politics truly work.

Based on what I do understand though, I get that apparently the Republicans are stomping their feet and threatening to take their ball and go home if the new health care law (which I freaking love) doesn't go away.  What I don't understand though is why the Republicans even care about the law.  Aren't most Republicans rich?  One would think they can afford any sort of health insurance.  Heck, most could probably pay out of pocket (I assume).

[Oniya]

A few things that I've gleaned from the 'side opposing ACA':

ACA would mean that people are covered for procedures/treatments that the side opposing ACA doesn't like - most often involving female reproductive organs.  This has little to do with 'how much it costs' and a lot to do with 'make me a sammich'.

On the money side, ACA would mean that insurance companies would be required to take on customers who might have expensive problems - problems that might not have become expensive if a) those people had had access to affordable health care earlier, or b) prices hadn't been driven up due to people having to default on medical bills (because they didn't have affordable health care for something that they couldn't head off).  Insurance companies make a profit on people not having to file claims (which is why your auto insurance can go down if you drive safely, etc.), so most of the upper-level people in insurance companies spend a lot of time  cozying up to their representatives to get them to oppose ACA.

[gaggedLouise]

A few things that I've gleaned from the 'side opposing ACA':

ACA would mean that people are covered for procedures/treatments that the side opposing ACA doesn't like - most often involving female reproductive organs.  This has little to do with 'how much it costs' and a lot to do with 'make me a sammich'.

On the money side, ACA would mean that insurance companies would be required to take on customers who might have expensive problems - problems that might not have become expensive if a) those people had had access to affordable health care earlier, or b) prices hadn't been driven up due to people having to default on medical bills (because they didn't have affordable health care for something that they couldn't head off).  Insurance companies make a profit on people not having to file claims (which is why your auto insurance can go down if you drive safely, etc.), so most of the upper-level people in insurance companies spend a lot of time  cozying up to their representatives to get them to oppose ACA.

You mean pundits in the U.S. haven't come around to the discovery that so many people who are receiving sick leave and medical benefits relating to supposed long-term diseases, those people actually enjoy being listed as ill, lying on the sofa, smoking dope or growing their own black businesses and collecting all kinds of taxpayer money without having to look for work anymore?  >:(

[kylie]

The reality is that the government is economically jeopardized no matter how you look at it.  Much of the economic 'recovery' that has been heralded since 2008, as cited by job growth figures, declining unemployment rate, and rising stock prices, are largely artificial.  More workers are part-time than full-time - a trend that I believe is likely to continue as the ACA rolls out.  As the number of part-time jobs increase, the unemployment rate seemingly declines, despite an increasing number of people turning to government assistance programs. 

This is all true and important...  But ACA is at least supposed to address the costs (individual and national) of so many people not having access to affordable health care. 

     And I don't see that the Republicans are offering to do much about all of this, except shouting "spend less"  -- usually on the very programs that would be keeping many people from falling still further into corporate-orchestrated bankruptcy (including, I might add short-term credit for medical costs at high interest rates from private lenders).

[gaggedLouise]

Kylie,

"If you don't look like you're for the people, then you can't buy the people!"

-The Joker in Batman (1989)

[Valthazar]

But there's no going back to a state of affairs where the state just stood back, in good or bad times, crossed its arms across the chest, and essentially let everything play out according to market rules and the wishes of private market forces, even if it meant that many millions had their means of work and survival washed out at a bad turn. Or if it risked taking down business areas that would be critical to the long-term survival of the nation, or credibility in war, in medical reserach etc. In any modern country the state is much more embroiled with investment, critical education and infrastructure building, providing key incentives to the economy that push it towards new goals and towards better results. (I was going to add "involved with public health and health care" to the list but of course that isn't always true...). I can see where you're coming from, but arguing with that the state is intervening in the economy to try to achieve fair conditions, ecnomic vitality and not getting even more of the population pushed into the street or kicked out of the labour market for many years (or for life), that's a bit like being angry at how some summer days bring rain and grey skies, not all sunshine.

The ACA is already a law - I was simply describing some of the potential economic effects - both positive and negative - that would arise as consequence of it.  The main point of my post, and gaggedLouise's post, was in discussing the optimal balance of government involvement in the free-market.  The American government has a track record of entering specific private sector industries for very egalitarian reasons - but unfortunately, often resulting in drastically inflated prices for those products, as a result of by-passing natural competition.

For example, several years ago, there was a passionate belief that "education is a right," and that everyone should be entitled to go to college.  At face value, this is ideologically very true - the vast majority of Americans want to create a fair society where people have the same opportunities, regardless of financial means.  However, many politicians criticized this line of thinking when it came to light how this would be achieved (through guaranteed federal loans to any applicant).  Many criticized the idea of providing universal education funded through loans, and were immediately deemed as 'elitist' and 'out-of-touch' because many people assumed that they were criticizing the end goal (right to education) rather than the flawed means of accomplishing it.  And as we all know, because of guaranteed federal loans, the college dropout rate is abysmal, and many people now are having second thoughts about their degrees.

On the same token, I implore many of you to understand the reasons many are concerned with the ACA law.  It is not that we don't share a common vision of seeing all Americans provided basic healthcare - but it is that some Americans see legitimate economic flaws in the way the law is written.  Most rational individuals anywhere on the political spectrum will agree that changes need to be made to the healthcare insurance system (except the Tea Party, I presume).  The question is, is the ACA the optimal means of achieving it?

[Bloodied Porcelain]

The ACA is already a law - I was simply describing some of the potential economic effects - both positive and negative - that would arise as consequence of it.  The main point of my post, and gaggedLouise's post, was in discussing the optimal balance of government involvement in the free-market.  The American government has a track record of entering specific private sector industries for very egalitarian reasons - but unfortunately, often resulting in drastically inflated prices for those products, as a result of by-passing natural competition.

For example, several years ago, there was a passionate belief that "education is a right," and that everyone should be entitled to go to college.  At face value, this is ideologically very true - the vast majority of Americans want to create a fair society where people have the same opportunities, regardless of financial means.  However, many politicians criticized this line of thinking when it came to light how this would be achieved (through guaranteed federal loans to any applicant).  Many criticized the idea of providing universal education funded through loans, and were immediately deemed as 'elitist' and 'out-of-touch' because many people assumed that they were criticizing the end goal (right to education) rather than the flawed means of accomplishing it.  And as we all know, because of guaranteed federal loans, the college dropout rate is abysmal, and many people now are having second thoughts about their degrees.

On the same token, I implore many of you to understand the reasons many are concerned with the ACA law.  It is not that we don't share a common vision of seeing all Americans provided basic healthcare - but it is that some Americans see legitimate economic flaws in the way the law is written.  Most rational individuals anywhere on the political spectrum will agree that changes need to be made to the healthcare insurance system (except the Tea Party, I presume).  The question is, is the ACA the optimal means of achieving it?

To be perfectly clear, the ACA is not meant to be a perma-fix for the health care issue. It is a stepping stone toward a better system, and it's better than anything else the Republicans were proposing (which was nothing). By and large one of our biggest issues economically in this country was health care costs, and pretty much every real expert (not funded by the Tea Party) agrees that in 10 to 15 years, the ACA will have made things substantially better. They won't be perfect (they never WILL be perfect), but they'll be better and the groundwork will be laid for more advancements down the line. No, the ACA isn't optimal. Nothing is. Life and economics are messy and there is no perfect way to do any of it, and taking massive leaps and bounds to try to fix a problem on the first go almost always gets us in to trouble, gradual processes are much more steady and allow us to make adjustments as we go without worry that the whole house is going to collapse because we're replacing a single flimsy board.

I'm really sick of being told "The ACA isn't the best fix for our problems" and then not hearing a better fix (or any fix at all for that matter). I can see some of the flaws in the ACA, I can, but this "it's not optimal" BS is ridiculous. Of course its not. Nothing is.

[Valthazar]

I'm really sick of being told "The ACA isn't the best fix for our problems" and then not hearing a better fix (or any fix at all for that matter). I can see some of the flaws in the ACA, I can, but this "it's not optimal" BS is ridiculous. Of course its not. Nothing is.

In all honesty, Obama's initial 2008 proposal was one I found to be quite sensible - since it would offer direct competition to private insurers, utilizing free-market forces to reduce the price of healthcare.