Shutdown of GOV

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Post by geekster » Fri May 13, 2011 10:51 pm

If the government shuts down I will:

Get up.
Go to work.
Come home.
Go to sleep::
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Post by can't sit still » Mon May 16, 2011 7:01 pm

There is plenty going on behind the scenes that we have no idea about. I'm sure that this is true for the budget-ceiling battle. The money ran out today. Geithner says that he can keep things going til August of he fails to make payments to the federal pension funds. I'm not sure what to make of this. It doesn't bode well for federal employees. This is an article by Drockton that talks about this. He predicted this some time ago.
He also predicted that other pension funds would be attacked. It has happened repeatedly in other countries. Generally, pension funds are forcibly converted into GOV bonds. Generally, this money is all spent. There are movements afoot to do this conversion.
http://www.moneyteachers.org/Robbing+Fe ... nsions.htm
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Post by can't sit still » Tue May 17, 2011 8:42 pm

Well, the accusations are flying now;
"Speaking to a New York audience, Geithner said that Republicans would bear responsibility for the first debt default in the nation's history if they insist they will not vote for an increase" http://finance.yahoo.com/news/Geithner- ... 1.html?x=0
The Dems want a budget increase that will give them smooth sailing until the elections. The Reps probably aren't too keen on this. I expect the rhetoric to ratchet up quite a bit. There is even the possibility that it will become entertaining. :D
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Post by Elderberry » Tue May 17, 2011 9:59 pm

geekster wrote:If the government shuts down I will:

Get up.
Go to work.
Come home.
Go to sleep::
Assuming that doesn't further tank the economy and you still have a job.
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Post by Elderberry » Tue May 17, 2011 10:01 pm

can't sit still wrote: There is even the possibility that it will become entertaining. :D
I don't find any of this entertaining.
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Post by can't sit still » Wed May 18, 2011 8:20 am

jk, a lot of people are suffering and it will get MUCH worse. I tried to sound the warning starting 4 years ago.
NOBODY is addressing the basic market forces that are the cause of much of this. THAT will be the cause of endless suffering. I don't discount or ignore all the suffering. I'm making provisions to do as much as possible to alleviate this suffering. Just as we "compartmentalize" the knowledge of our own death, I compartmentalize the inescapable suffering.
Most of our politicians are inept, lying, thieving bastards. It is entertaining to watch them try to duck and deflect responsibility. That doesn't stop me from commiserating with those who are in a bad situation.
I bought several acres of farmland for crops and planted dozens of fruit trees. I hope to be in a position to give away quite a bit of food. and provide support. I hope to make a bit of a difference. I still find it funny that DSK is in jail. His previous night's lodging cost $ 3,000 a night.
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Post by Elderberry » Wed May 18, 2011 8:37 am

You misunderstood my meaning. I wasn't referring to the people that might suffer, I was referring to the politicians and their malpractice in performance of their jobs.
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Post by can't sit still » Wed May 25, 2011 8:37 pm

Well, we avoided the shutdown at reaching the debt ceiling. Timmy is going to raid federal pensions to get us through to August. Let's look at the math. GOV spends $ 10.46 billion a day. Actually, it will be a bit higher,,,, necessary new wars and all that. So, let's say for ease, Timmy has bought a delay of 100 days. Hhhmmm, that means that when congress finally addresses the debt ceiling, the debt will be $ 1.04 trillion higher. Let's say that they raise the ceiling from $ 14.29 trillion to $ 15.75 trillion. That leaves $ 330 billion of extra to run the show. That is IF , they reimburse the pension fund.
But wait, $ 330 billion is only a months worth.
http://www.zerohedge.com/article/we%E2% ... es-default
There is one other sticking point. If the ceiling is raised by $ 1.46 trillion, SOMEBODY has to buy a BUNCH of bonds. That will get us happily to September.
There seems to be another sticking point. Federal pensions are already underfunded by $ 4 trillion;
http://www.npr.org/templates/story/stor ... Id=5454161

Edit; BTW, GOV does not want you spending your money when they can put it to better use;
http://www.bloomberg.com/news/2011-05-1 ... funds.html
One gets the distinct impression that Timmy is going to get the gold mine and the federal workers are going to get the shaft.
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Post by can't sit still » Sun Jun 05, 2011 8:35 am

This whole "shutdown" business is going to get to be a big deal before long. I believe that this will be the arena where the big cuts will be implemented. 52.5 % of Americans rely on a check from GOV. Should GOV cut back on spending, there will be a dramatic fallout. Apparently, the House plans to make big cuts;
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Post by can't sit still » Tue Jun 07, 2011 6:28 pm

Goolsbee has now left. Here's a bit of humor.
"He has helped steer our country out of the worst economic crisis since the Great Depression, and although there is still much work ahead, his insights and counsel have helped lead us toward an economy that is growing and creating millions of jobs," Mr Obama said in a statement."
"Mr Goolsbee warned that a failure by the US Congress to raise the nation's borrowing limit could be "catastrophic" for the economy"
http://www.telegraph.co.uk/news/worldne ... signs.html
So, he warns of a catastrophe and then,,, runs away. All the rest ran away too.
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Post by can't sit still » Fri Jun 24, 2011 8:06 pm

The Reps have walked out on bi-partisan budget talks that were supposed to avert a shutdown. There are no new meetings scheduled;
http://news.yahoo.com/s/nm/20110623/pl_ ... RlYnR0YWw-
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Re: Shutdown of GOV

Post by can't sit still » Wed Jun 29, 2011 8:05 pm

Everything that you read on fixing the deficit is centered on cutting entitlement. There is no mention of cutting defense,,, OH NO ! This would jeopardize the security of America. There is more and more talk about the fallout from a failure to raise the debt ceiling.
http://www.thisisdevon.co.uk/Injunction ... story.html#
Is the "fix" in already?
The baby-boomers are the largest voting bloc. Can obummer cut entitlements and still expect to get re-elected? The election is just TOO far off to fake it. The credit markets aren't going to wait that long. The neo-keynesians will bring it all down and obummer will be the fall-guy. August isn't going to be pretty. If the bankers don't get the $ trillion tax increase, they're going to downgrade our credit and get the $ trillion by raising debt-service costs.
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Re: Shutdown of GOV

Post by can't sit still » Fri Jul 08, 2011 8:09 pm

Well, the shutdown talk continues. It is questionable whether or not it is serious. "The news came as corporate America reacted angrily to President Obama’s plans to repeal a tax break for company jets" "a move that it estimates will generate $3bn for the US Treasury over the next two decades."
Hmmm, let's see,,,, $ 3 billion spread out over 20 years. BFD !!
http://www.telegraph.co.uk/finance/econ ... etary.html
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Re: Shutdown of GOV

Post by can't sit still » Sun Jul 10, 2011 9:54 am

Ron Paul has an interesting plan on averting a shutdown;
http://curiouscapitalist.blogs.time.com ... ter-twice/
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Re: Shutdown of GOV

Post by can't sit still » Tue Jul 12, 2011 5:56 pm

The shutdown / default talks are getting seriously deadlocked. It's almost as if the pols plan to shutdown GOV to punish the dems, regardless of ANY fallout. " Any failure to reach a deal would "cause the stock market to crash," predicted Senate Majority Leader Harry Reid, D-Nevada."
The stock market is going to crash anyway. Is this a "setup" to play the blame-game?
http://www.cnn.com/2011/POLITICS/07/12/ ... ?hpt=hp_t1
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Re: Shutdown of GOV

Post by can't sit still » Wed Jul 13, 2011 7:17 pm

Well, the shit is flying fast and furious. Quoting obummer; “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue, because there may simply not be the money in the coffers to do it. What? So, the President admitted there is no money in the Social Security Trust Fund?"
Technically, SS doesn't have to worry a bit about the debt ceiling. It ALREADY has $ 7.1 trillion.
"Here’s what the government’s own website says, “Unlike marketable securities, special issues can be redeemed at any time at face value."
Obummer wouldn't dream of holding back money from defense contractors. NOPE, he's going to hold pensioners hostage.
http://usawatchdog.com/gloves-come-off- ... ing-fight/

McConnell has proposed giving obummer sole power to raise the debt ceiling $ 2.4 trillion. http://www.msnbc.msn.com/id/43725919/ns ... itol_hill/
Considering all the rhetoric, I don't think that this is going to end without bloodshed.
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Re: Shutdown of GOV

Post by Elderberry » Wed Jul 13, 2011 8:14 pm

And it won't be Obama's. He'll get exactly what he wanted from the beginning. The debt ceiling will be raised with no conditions. Or, he'll get the 4 trillion dollar deal with revenue increases. Either way, he wins.
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Re: Shutdown of GOV

Post by can't sit still » Wed Jul 13, 2011 9:03 pm

By "bloodshed", I meant the people, not the politicians. I suspect that you are incorrect in your claim of what the outcome will be. He may very well get what he wants. That may very well be the beginning of the end as far as the bond markets are concerned. The bond markets can turn on a dime for no perceptible reason.
http://gonzalolira.blogspot.com/2011/07 ... urope.html
The "fix" may already be in. Bernanke is already talking about QE III. Gov can't possibly raise the debt ceiling if the FED doesn't buy at the auctions. There are a few possibilities;
1: The ceiling gets raised
Bernanke prints money and the bond market collapses.
2: The ceiling does not get raised. We default.
Our credit is downrated and treasuries are dumped. Many investment houses are required to dump instruments that are not Aaa. GOV lays off millions.
3: The ceiling gets raised AFTER a default.
This guarantees that the FED has to buy all bond issuance. That could very well destroy the stock market.

It doesn't matter what immediate victory he might get. It mattes what the result is.
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Re: Shutdown of GOV

Post by can't sit still » Thu Jul 14, 2011 6:43 pm

Here are a few numbers from the Daily Reckoning;
'''' drama in Washington over raising the Aug. 2 debt ceiling deadline. According to the Bipartisan Policy Center, tax revenue for the 29 days of August after the 2nd will total roughly $172.4 billion. That compares to $306.7 billion in spending.

Ordinarily, the Treasury would cover that $134.3 billion gap by issuing new Treasury debt. But after Aug. 2, it won’t be able to do so. That means Uncle Sam would have to immediately balance his books.

What would that look like?

Well, he’d have to choose his priorities. The Bipartisan Policy Center report breaks down the government’s Aug. 3-31 expenses in a way that shows what the $172.4 billion in revenue can cover... and what it can’t. "

"The Social Security checks would still be cut... but not income tax refunds. Medicare and Medicaid would be kept going... but not food stamps. Military contractors would still be paid... but not the troops.

They can move certain items above the $172.4 billion line and others below it... but something has to give. And, believe it or not, matters are even worse than that list of priorities reveals.

About $507.4 billion in existing Treasury securities come due between Aug. 3-31. To “roll over” that debt, the Treasury must issue new securities. If the unthinkable happens, and the government isn’t able to “roll over” the debt?

$100 billion of that debt matures on Aug. 4. Another $100 billion matures a week later, on Aug. 11. That eats up the entire $172.4 billion in revenue expected for the month right there... before the government spends a penny on anything.

Unless the Treasury Department is sitting on some slush fund we don’t know about, it’s game over. The United States defaults... triggering those credit default swaps.

“Let’s imagine,” said a Newsweek piece by Daniel Gross last spring, “a world in which the US government, lacking the will to tax or cut spending, can’t scrape up the cash to stay current on interest payments and can’t roll over debt as it matures.

“That would trigger a huge decline in the value of Treasuries and mortgage-backed securities. The balance sheet of every US financial institution – JPMorgan, Goldman, Citi, your neighborhood bank, the Federal Reserve, money-market funds – would be decimated. There wouldn’t be a single solvent bank, insurer, or company in the United States.

“The large multinational banks, which have significant US operations and plenty of this stuff on their books, would likewise be wiped out. Oh, and foreign holders of US debt...would be toast, too.

“In this dystopia,” continued Gross, “who, precisely, would be able to make good on the insurance sold on US government debt? The last time we had a set of events that were supposed to trigger large- scale payment of credit-default swaps, the system basically shut down. All the investors who bought insurance on financial instruments from AIG got paid off in full only because the US government bailed the company out.

“Who would bail out the Treasury Department and the Federal Reserve?”

Who, indeed? "

"You don’t ever want a crisis to go to waste; it’s an opportunity to do important things that you would otherwise avoid". -- Rahm Emanuel

GOV seriously wants to wipe out the social net. If GOV can manage to default and spread the blame equally, it may believe that Aug 2nd is the perfect opportunity. If this happens, there is no going back.
Treasury Secretary Timothy Geithner says many Americans will face hard times for a long time to come. "He says that for a lot of people "it's going to feel very hard, harder than anything they've experienced in their lifetime now, for a long time to come."
Geithner is quitting later this year,,, just like Rahm and everyone else. Maybe he knows something that we should know.
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Re: Shutdown of GOV

Post by can't sit still » Fri Jul 15, 2011 9:01 pm

It looks like GOV is tossing the shutdown problem like a hot potato. They offered [for a while] to give obummer sole power to do an increase. This would be tied to an automatic $ 1.5 trillion decrease spending,,, over 10 years. Comes to $ 150 billion a year. http://www.chicagotribune.com/news/sc-d ... 3011.story
The Reps want $ 2.4 trillion in cuts,,, $ 240 B a year.
http://www.guardian.co.uk/business/2011 ... ma-default
Seems funny, not too long ago, congress fought tooth-and-nail to pass the prescription drug plan and the Health Care bill. SO, are they going to leave Big Pharma intact and kill SS? Increase the military budget and wipe-out Medicare? They bitch about $ 37 billion for unemployment but, don't mention $ 410 billion for debt-service. Will they continue the bailouts but massacre veterans? raise SS to 70? Fund Israel but not Detroit? Continue to bailout Greece but let New Jersey crash.
http://www.rense.com/general94/debt.htm

Who knows?
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Re: Shutdown of GOV

Post by BAS » Sat Jul 16, 2011 5:54 am

Remember that the difference between reality a fiction is that fiction has to make sense.
"Nothing is withheld from us which we have conceived to do.
Do things that have never been done."
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Re: Shutdown of GOV

Post by can't sit still » Sat Jul 16, 2011 7:27 am

Dunno if this makes sense. GOV could sell off it's [our] gold to pay for operations;
http://www.washingtonpost.com/national/ ... story.html
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Re: Shutdown of GOV

Post by can't sit still » Sun Jul 17, 2011 7:42 pm

Rolling Stone seems to believe that obummer has openly adopted the Rep strategy concerning taxes. http://www.rollingstone.com/politics/bl ... l-20110711
Apparently, jobs will not be an important issue. The piece-of-shit in the White House says that 80% of Americans want higher taxes.
The Pentagon evidently sees huge cuts in it's future. It sees a return of the draft. http://www.stripes.com/news/cartwright- ... t-1.149228
I hope that they close down the military completely. They won't take any responsibility for all the lives they destroy. The wars are wars-of-choice. Why should so many lives be destroyed for nothing? "The number of US veterans, homeless on any given night from June this year, now stands at a frightening 75,700. "
http://feeds.bignewsnetwork.com/?sid=811969
"And, with budget cuts in veterans affairs departments, the situation is expected to get worse."
Serve your country,,, come back and live on the street. Disgusting and pathetic.
But, don't worry, obummer has set new records for raising campaign money from the wealthy.
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Re: Shutdown of GOV

Post by can't sit still » Tue Jul 19, 2011 8:40 pm

Moodys says that they may downgrade U.S. debt even if we raise the debt ceiling. It's not our borrowing power that is questionable. It's our repayment ability.
http://www.financialsense.com/node/5880 ... m_term=FSO
Should we get a downgrade, our debt-service costs will go much higher. That would mean more money for the banks and less for you and me. Dagong ratings and Weiss ratings have already downgraded U.S. debt.
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Re: Shutdown of GOV

Post by can't sit still » Thu Jul 21, 2011 7:16 pm

Now, the FED admits that it has been preparing for months for a default. http://uk.reuters.com/article/2011/07/2 ... IT20110720 Congress says that they are coming together,, somewhat. The number that they seem to be gravitating towards is a reduction of $ 3.7 trillion. Moodys said that they would downgrade anyway. OK, so they downgrade and interest rates are driven up. GOV needs to severely cut expenditures to pay the now much-more-costly debt service. The economy will be gutted to pay off the banks.
Those who have money will conserve it. The velocity-of-money will crash. The economy will stall. The tax-base will fall even farther. Demands for the safety-net will rise even further. We will be in a deflationary depression roughly 2-3 times as bad as Great Depression I.
Debt service is now $ 410 billion. If interest rates go up, it is expected to climb to about $700 billion [roughly] . So, if GOV cuts $ 3.7 trillion, that is $ 370 billion a year. $ 370 billion saved, added to the current $ 410 billion adds up to $ 780 billion.
Not to worry. We should be able to come up with the amount that the banks want. It balances out very close. Just our luck.
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Re: Shutdown of GOV

Post by can't sit still » Sun Jul 24, 2011 4:29 pm

Now, Time says the number is $ 6 trillion. http://www.time.com/time/nation/article ... 30,00.html Since the House originates spending bills, this is significant. This number is so LARGE that it will probably take several days to reconcile it with any Senate version. This is definitely "shock doctrine". One could surmise that the Reps will try to get into the White House next election. I suspect that the assorted Pols are going to argue over this for quite a while. That more-or-less insures a default. They have proposed a short-term lift in the debt ceiling to avoid default. I suspect that it will be difficult to reach any agreement in the 8 days.
Our former comptroller-general has this to say about a default; http://finance.yahoo.com/blogs/daily-ti ... 01130.html
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Re: Shutdown of GOV

Post by can't sit still » Mon Jul 25, 2011 7:36 am

More numbers; "professor Laurence Kotlikoff in Bloomberg, “the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade"
http://blogs.forbes.com/greatspeculatio ... t-arrives/
It looks like the Reps want ALL cuts and no taxes. Apparently, they have refused to do along with any tax increases;
http://ilene.typepad.com/ourfavorites/2 ... ocked.html

Just found this. There is a movement afoot to create a new legislative body that would decide all this painful stuff and take the heat off congress.
"A Super Congress would be less accountable than the system that exists today, and would find it easier to strip the public of popular benefits"
http://www.huffingtonpost.com/2011/07/2 ... 07887.html
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Re: Shutdown of GOV

Post by can't sit still » Fri Jul 29, 2011 8:09 am

"At 6.00 PM EDT there is a vote on the Republican debt ceiling plan. It will lose, either in the House or subsequently in the Senate. There will then be about 100 hours left before the August 2 deadline, which may or may not be an actual deadline. An agreement, of course, will be reached at the eleventh hour"
http://theautomaticearth.blogspot.com/2 ... -swan.html
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Re: Shutdown of GOV

Post by can't sit still » Fri Jul 29, 2011 9:14 pm

Seems that neither party wants more taxes. They can't yet agree on cuts;
http://www.marketwatch.com/story/house- ... ry_popular
John Williams does not believe that there will be any default. He does argue that a credit downgrade is inevitable and that the downgrade would b worse than a default. http://www.24hgold.com/english/news-gol ... old+Report
GOV will cut the absolute minimum that it needs to cut to retain the bondholders. We are in a deflationary depression. EVERYBODY knows that big cuts would cause the depression to get worse. GOV has to cut enough to keep the bond market from getting nervous about the mountain of debt but, NOT cut so much that America would compromise it's ability to service the bond load.
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Re: Shutdown of GOV

Post by can't sit still » Sat Jul 30, 2011 7:24 pm

It's getting more interesting every day.
"It was always assumed that after weeks of grandstanding in Washington a debt deal would be reached with a week or so to spare.

But even seasoned observers of political theatre on Capitol Hill have been dumbstruck by the failure to find a compromise so far. "
"Opponents of a deal have accused the administration of scare tactics "
There is a danger that the admin WILL crash the system just to prove that the problem is real and not just scare tactics. The American economy appears to be in line to fall as "collateral Damage" to the shit-fight in D.C. The pre-election posturing seems to be far more important than any negative fallout.
http://www.telegraph.co.uk/news/worldne ... -bill.html

HMMMmmm, if the checks stop, the BATF and the BLM may desert the Playa.
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