USA government heading to shutdown?

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**MeanGreenStompa**

Could some more politically erudite Americans explain how this will work in practice? The Government will be 'shut down'?

http://www.guardian.co.uk/commentisfree/michaeltomasky/2011/apr/06/government-shutdown-federal-budget

The Guardian wrote:
So, now the odds are that we're headed towards a government shutdown. For those of you who'll want to say it's Obama's fault because he refused to accept this new extension offer from the GOP, I note that that came with a massive string attached: cuts of $12bn more to the domestic discretionary budget. That is not parcelled out over the fiscal year. That's $12bn in that one week. And that's on top of the $10bn already cut in the two previous continuing resolutions. Finally, Obama said "enough".

No, it's definitely the GOP that's driving the shutdown. Why? On the surface, the "why" is over the size of cuts. But I mean: really, really, really why. I have two theories:

1. It's a kind of psychological thing among especially (but not limited to) the new members: they came here to shake things up, not go along and get along; and this is shaking things up. We all have these moments in our lives where we actually want to precipitate a crisis, just to see what would happen and to show observers that we mean business.

Fascinating little report in Politico today, in which a source from inside that fateful GOP House caucus meeting Monday night spilled some beans:

"The Democrats think they benefit from a government shutdown. I agree," Boehner said during a closed-door, 90-minute meeting on House Republicans on Monday night, according to several lawmakers who attended the session.

Boehner's opinion was quickly backed up GOP lawmakers who were serving in Congress during 1995, when former speaker Newt Gingrich (Georgia) squared off with then-President Bill Clinton by shutting down the government twice. Reps Don Young (Alaska), Dana Rohrabacher (California) and Buck McKeon (California) – a close ally – supported Boehner's position. Dozens of other Republicans rallied to support Boehner as well, in a moment that one GOP insider called a "turning point" for House Republicans.

"My view is that a government shutdown doesn't benefit anyone necessarily, but if one party or the other is going to get an edge, it's probably the Democrats. I agree with the speaker there," Rep Steve LaTourette (Ohio) told Politico. "If you look at the government shutdown of 1995, it guaranteed President Clinton's re-election. And that's what this would do. If you want to cede the presidential race in 2012, you shut down the government."

But while Boehner may have backing from the old veterans in his camp, he's run headlong into the Tea Party group of House Republicans who believe that Obama and Senate Democrats would come off the worse if a shutdown actually takes place.

These hardline Republicans, not all of whom are freshmen, have forced Boehner to play hardball with the Democrats or face a potential threat to his own survival as speaker. This hardcore faction is insisting on no less than the $61bn spending cut package passed by the House in February, and they've refused to back to any proposal that includes smaller reductions […]

The split among Republicans breaks somewhat along generational lines, but even more clearly between those who have served in government – either in the state, local or federal level – and those who have never done so.

So they're being told by people with experience that they're going to hurt their party, and they don't care. And how about that LaTourette fellow, eh? LaTourette's Syndrome: saying things publicly that many people think but wouldn't even say privately.

So that's theory one: they came here to fight and they just want to get it on. Once that psychology gets in a certain number of brains, a tipping point is reached.

2. It's about economics and the presidential election. The GOP knows that if the economy keeps improving and unemployment is down to 8% by election time, their chances in 2012 are fairly slim. Now, I hasten to note that that is a big if, so who knows? But everyone understands this.

A shutdown affects the economy immediately and directly. Hundreds of thousands of people in the public sector aren't working and therefore aren't spending. Hundreds of thousands more in the private sector who depend almost entirely, or at least largely, on government contracts for their livelihoods are out of luck. This is everyone from GM to pencil manufacturers. A huge swath of the economy just closes. If the shutdown lasts long enough, layoffs come along. Two bad months slow the tender momentum that now exists.

There you are. Psych and Econ.

**Amaya**

Only nonessential sections.

**Melissia**

Non-essential to rich people at any rate, not to the poor who they often benefit.

Keep in mind that these tea party repugs aren't actually trying to solve the deficit and debt problem like they claim they are. The only way to do that is to push for higher taxes AND budget cuts. They're only focusing on half the equation.

**rubiksnoob**

This makes me mad. These people were elected to serve the best interests of the people, and gak like this most definitely isn't in anyone's best interests. Instead of trying to improve the country these ass holes just go to washington and dick around, not caring about anything but their own egos.

**Polonius**

Basically, the government stops doing anything that's not related to protection, security, etc. That's still pretty broad, of course.

The USPS doesn't rely on the budget, so keeps running. Social Secuirity checks aren't paid out of the budget (well, retirment and Title II disability aren't, SSI payments are).

It's looking pretty real. I'm at training for my federal job, and they've got it short and are making sure we all get home and off the clock by midnight tomorrow.

**youbedead**

Polonius wrote:Basically, the government stops doing anything that's not related to protection, security, etc. That's still pretty broad, of course.

The USPS doesn't rely on the budget, so keeps running. Social Secuirity checks aren't paid out of the budget (well, retirment and Title II disability aren't, SSI payments are).

It's looking pretty real. I'm at training for my federal job, and they've got it short and are making sure we all get home and off the clock by midnight tomorrow.

Or what they'll lock you in an let you fend for yourselves.

**Melissia**

For reference for my previous statement... in 2010, the government owed (and this is directly from the treasury department's website) $413,954,825,362.17 in interest alone.

That's 400 trillion? dollars, to put that ten billion dollar cut in perspective. Yeah, it's nothing, a pittance and not some all-important thing which might stand even a remote chance of staving off the growth of our deficit and debt. Last year, our government made just over 2 trillion. Even if the interest simply stopped growing period (not going to happen) it'd take something like 200 years to pay it off if every single dollar the us government owed was dedicated solely to paying off the interest.

[edit: Meh, I dunno if I'm doing the math right. Someone here check it, I gotta go.]

**Micromegas**

Meh indeed.

**Polonius**

youbedead wrote:
Or what they'll lock you in an let you fend for yourselves.

they can't allow anybody that's doing someting non-essential to work absent congressional appropriation, because accepting the work would incur a debt that the agency is not authorized to accept or repay.

**MeanGreenStompa**

So basically, the debt stands absolutely no chance of being altered by the cuts demanded by the far right wing of the republicans?

So these cuts, which will hurt the nation's poorest elements, are basically pissing into the wind?

**Melissia**

That's how I see it, yes. I'll continue this once I get in class, heh.

**Polonius**

MeanGreenStompa wrote:So basically, the debt stands absolutely no chance of being altered by the cuts demanded by the far right wing of the republicans?

So these cuts, which will hurt the nation's poorest elements, are basically pissing into the wind?

Both sides are playing politics with no real regard for either the debt or government. The right wing refused to even discuss raising taxes while pretending to be worried about the debt. The left wing wants to keep money flowing to it's constitutients. Neither are willing to tackle the real problems or talk about the need for higher taxes.

What's interesting is that thanks to the CRs, the economy has actually improved by the time this happened. Jobs are coming back, and it's getting harder to make the "we need to cut taxes to stimulate the economy" argument. Not a lot harder, but a little.

**agnosto**

Melissia wrote:For reference for my previous statement... in 2010, the government owed (and this is directly from the treasury department's website) $413,954,825,362.17 in interest alone.

That's 400 trillion? dollars, to put that ten billion dollar cut in perspective. Yeah, it's nothing, a pittance and not some all-important thing which might stand even a remote chance of staving off the growth of our deficit and debt. Last year, our government made just over 2 trillion. Even if the interest simply stopped growing period (not going to happen) it'd take something like 200 years to pay it off if every single dollar the us government owed was dedicated solely to paying off the interest.

[edit: Meh, I dunno if I'm doing the math right. Someone here check it, I gotta go.]

That's 400 billion, 400 trillion would see the US giving the Chinese land as they foreclosed on our debt.

**biccat**

Melissia wrote:Keep in mind that these tea party repugs aren't actually trying to solve the deficit and debt problem like they claim they are. The only way to do that is to push for higher taxes AND budget cuts. They're only focusing on half the equation.

What's a "repug"? I don't see anyone using the term "Demon Rats" or some similar perjorative to refer to DNC members, could you possibly refrain from marginalizing political opposition with derisive terms? It doesn't help your position.

On topic, the government can function fine by cutting spending. The only reason to raise taxes is if (Laffer curve notwithstanding) you believe there are essential programs that should not be cut.

Polonius wrote:Jobs are coming back, and it's getting harder to make the "we need to cut taxes to stimulate the economy" argument. Not a lot harder, but a little.

Is it any harder to make the "we need more economic stimulus to help the economy" argument?

**Melissia**

Repug is a local term for republican. Frankly I'm not sure where it came from.

agnosto wrote:
Melissia wrote:For reference for my previous statement... in 2010, the government owed (and this is directly from the treasury department's website) $413,954,825,362.17 in interest alone.

That's 400 trillion? dollars, to put that ten billion dollar cut in perspective. Yeah, it's nothing, a pittance and not some all-important thing which might stand even a remote chance of staving off the growth of our deficit and debt. Last year, our government made just over 2 trillion. Even if the interest simply stopped growing period (not going to happen) it'd take something like 200 years to pay it off if every single dollar the us government owed was dedicated solely to paying off the interest.

[edit: Meh, I dunno if I'm doing the math right. Someone here check it, I gotta go.]

That's 400 billion, 400 trillion would see the US giving the Chinese land as they foreclosed on our debt.

Thank you, I was wondering if i got it right.

Even still, 400 billion dollars in interest alone means that the ten billiion dollar cut is around a quarter of a tenth of one percent,

**Cannerus_The_Unbearable**

...so the guy who works at a grocery store actually comes out ahead for once as people freak out about stockpiling food? Count me in

**Polonius**

biccat wrote:
Polonius wrote:Jobs are coming back, and it's getting harder to make the "we need to cut taxes to stimulate the economy" argument. Not a lot harder, but a little.

Is it any harder to make the "we need more economic stimulus to help the economy" argument?

I'm not a huge fan of pretending that government spending can "fix" the economy. but if we do pretend it, we also need to raise taxes when times are good.

**Melissia**

There's no pretense, we have historical data for it.

But really, we'll always have ups and downs in an economy-- what the government spending tries to do is stabilize the ups and downs so that it is a growth on average.

**youbedead**

biccat wrote:
Melissia wrote:Keep in mind that these tea party repugs aren't actually trying to solve the deficit and debt problem like they claim they are. The only way to do that is to push for higher taxes AND budget cuts. They're only focusing on half the equation.

What's a "repug"? I don't see anyone using the term "Demon Rats" or some similar perjorative to refer to DNC members, could you possibly refrain from marginalizing political opposition with derisive terms? It doesn't help your position.

On topic, the government can function fine by cutting spending. The only reason to raise taxes is if (Laffer curve notwithstanding) you believe there are essential programs that should not be cut.

Polonius wrote:Jobs are coming back, and it's getting harder to make the "we need to cut taxes to stimulate the economy" argument. Not a lot harder, but a little.

Is it any harder to make the "we need more economic stimulus to help the economy" argument?

Actually yes it is, as that argument is supported by historical precedent, see great depression, post WW2 Europe, post civil war depression, 1850-1900 japan etc.

**dogma**

biccat wrote:The only reason to raise taxes is if (Laffer curve notwithstanding) you believe there are essential programs that should not be cut.

There's also the matter of whether or not the economy can bear the transition of employment from the public sector to the private one, as that naturally incurs a transitional cost that might be regarded as significant when taken in the context of escalating debt. Basically, it may not be possible to make responsible cuts at a rate that is fast enough to outpace the rising tide of red ink, meaning that taxes would have to be raised in order to make up the difference.

biccat wrote:
Is it any harder to make the "we need more economic stimulus to help the economy" argument?

I didn't realize that there were important people still making that argument.

Automatically Appended Next Post:

Melissia wrote:There's no pretense, we have historical data for it.

But really, we'll always have ups and downs in an economy-- what the government spending tries to do is stabilize the ups and downs so that it is a growth on average.

I believe the point is that the economy can't really be broken, so it also can't be fixed.

**agnosto**

My 2 cents as a taxpayer and voter:

We hired these people to do a job and they're falling down on it/ asleep at the wheel. They've become a group of bickering children that are unwilling to negotiate or compromise. I'm sick of all the party politics and waste of time and monetary resources. My message to my representatives was this "Do your jobs or we'll find someone who will."

My take on the economy is that we, as a nation, have gotten ourselves in a financial mess. I, like many others, have done this in the past with my own personal finances; however, the difference here is that our government seems incapable of living within its means. I don't like many things about my state government but at least they do one thing correctly; our state constitution mandates a balanced budget each year. If revenues are down, we cut; just like in a regular person's home.

I see a few responsible choices, balance the budget by reducing expenses, increase revenues through taxes or a combination of the two.

**Melissia**

I believe the point is that the economy can't really be broke

It can.

Automatically Appended Next Post:

agnosto wrote:I see a few responsible choices, balance the budget by reducing expenses, increase revenues through taxes or a combination of the two.

We aren't capable of cutting enough of the budget to cover even the interest we owe, and we aren't willing to raise taxes enough to do it either... so the only real option is an amount of both.

**TheHammer**

Of course we should be raising taxes on the wealthy.

It is painfully obvious that at a certain point the accumulation of ever greater amounts of wealth only hurts the economy. Or, to better phrase it, at a certain point the only way to further accumulate wealth is through means that are destructive for the rest of the society. Keeping taxes low on the wealthy only serves to further encourage such horror.

It is doubly disgusting that when the Bush-Obama tax cuts were extended, furthering the deficit, that this only served to exacerbate the problems we experience and allow some to redouble their efforts to wage class warfare against the poor and middle class.

**Melissia**

Also, the Bush-Obama tax cuts is going to cost us many, many trillions of dollars in revenue, and that's money that can't be used to pay for the debt.

**Scrabb**

Melissia wrote:-- what the government spending tries to do is stabilize the ups and downs so that it is a growth on average.

That's what it tells us during the rough years. During the good years the spending continues. Not that this helps us right now.

**biccat**

dogma wrote:
biccat wrote:The only reason to raise taxes is if (Laffer curve notwithstanding) you believe there are essential programs that should not be cut.

There's also the matter of whether or not the economy can bear the transition of employment from the public sector to the private one, as that naturally incurs a transitional cost that might be regarded as significant when taken in the context of escalating debt. Basically, it may not be possible to make responsible cuts at a rate that is fast enough to outpace the rising tide of red ink, meaning that taxes would have to be raised in order to make up the difference.

Which is a valid point. However, the President's current proposal is to increase spending in the next fiscal year, which would only exacerbate the problem.

dogma wrote:
biccat wrote:Is it any harder to make the "we need more economic stimulus to help the economy" argument?

I didn't realize that there were important people still making that argument.

Only if you consider the federal reserve to be unimportant.

**Melissia**

Scrabb wrote:

Melissia wrote:-- what the government spending tries to do is stabilize the ups and downs so that it is a growth on average.

That's what it tells us during the rough years. During the good years the spending continues. Not that this helps us right now.

And the point of stabilizing also means that we don't want any bubble growths.

**notprop**

This type of thing is not un common though, allot of Europe (France and Italy) shut down for most of August.

Even Parliment in the Uk shuts down for summer holidays.

Its the only time the Deputy PM actually has something relevent to do - "right I'm off now, and whatever you do, do not press that red button"

John Prescott/Nick Clegg - "Aye so if anything goes wrong press the red button, gotcha. Bye"

**LordofHats**

youbedead wrote:Actually yes it is, as that argument is supported by historical precedent, see great depression

There's a lot of debate and a lot of evidence that says Roosevelt made the Depression worse not better. Others say he didn't change it at all. Economic historians are still slapping each other over it.

post WW2 Europe, post civil war depression, 1850-1900 japan etc.

It's nice to think that the economy lives in a bubble but it doesn't work that simply. I don't know much about the Meiji Era of Japan, but post WW2 and the Reconstruction South had their economies effected more by outside sources than by their domestic governments.

A better example of what you want is Muhammed Ali's Egypt in the 1800's. I mean, sure he wasted Egypt's social order and created a new underclass with racial overtones, but he gave the economy a big kick in the ass and as far as I know it worked. It's partially his fault the Reconstruction recessions related to the Cotton bubble happened

**Kilkrazy**

The government spending more isn't a problem if the economy grows quickly, increasing tax receipts.