kinder, gentler debt ceiling discussion

[Chad]

I told my wife this shutdown is a good thing for some of these workers, they need a wakeup call if they think a government job makes them immune to interruptions in job income. Anti-fragility.

I hope it is a wake up call for them. Even if they never face this again, it will prepare them for retirement.

I'm hoping this shutdown goes through the end of this week. This is the longest I have had off in a decade and I'm quite enjoying it. Though, it does bother me not to be putting money in to my investment accounts every few weeks.

[Spartan_Warrior]

I told my wife this shutdown is a good thing for some of these workers, they need a wakeup call if they think a government job makes them immune to interruptions in job income. Anti-fragility.

It's taught me a lesson. I did think government work was fairly secure, so I had recently been moving away from keeping liquid cash on hand. I'll run out of cash on hand by the end of November. After that I'll have to dip into investments. Due to the way I've set up my Permanent Portfolio across 401k, Roth, and personal accounts, the assets I have access to without tax penalty are all currently in the red (mostly gold and long bonds). So even though I technically have tens of thousands at my disposal to continue paying my bills, it irritates me that I'd lose hundreds or thousands more by actualizing paper losses.

I realize it's unlikely that the shutdown will last into December anyway, but it makes me nervous thinking about it--like, the good, "inspiring me to fix it" kind of nervous. I will have to reevaluate the way I spread out my portfolio between tax-advantaged and liquid personal accounts. It's unfortunate because the cash and equity options in the Thrift Savings Plan (C Fund and G Fund) really are top-notch options for holding those asset classes in terms of fees and interest--the G Fund is basically a cash account that provides long term bond rates. I started holding most of my cash there because I cringed having it in my "high-interest" savings account at 0.8%. But obviously there's something to be said for liquidity, and that security comes at a price. Lesson learned.

I feel sorry for those who are less prepared than I am, which is probably a great majority. For them, it may be a rather uncomfortable lesson.

[Seneca]

Based on what source we look at Obama is either out of Gen X by a year or two, or just barely in. Given how "soft" the generation "science" is I don't think we can say either way on Obama.

Though, Cruz and Ryan both fall well into Gen X.

LOL, I'm trying to decide if that's your own veiled shot at Cruz and Ryan.

Howe calls Pres. Obama Gen X, in fact describes him as a archetypal.

http://www.google.com/hostednews/afp/ar ... yCKszO0Izw

[Seneca]

I hope it is a wake up call for them. Even if they never face this again, it will prepare them for retirement.

I'm hoping this shutdown goes through the end of this week. This is the longest I have had off in a decade and I'm quite enjoying it. Though, it does bother me not to be putting money in to my investment accounts every few weeks.

It's taught me a lesson. I did think government work was fairly secure, so I had recently been moving away from keeping liquid cash on hand. ...I feel sorry for those who are less prepared than I am, which is probably a great majority. For them, it may be a rather uncomfortable lesson.

Appreciate you guys' level headed response to my comments despite being on the wrong end of this one. What a commentary on the power of ERE...or even the most basic of financial advice to keep an emergency fund on hand.

My BIL is an "essential" employee and they are facing tough times if it goes much longer, which is a sad commentary on their personal system. I very softly pointed the above points out to my sister last week, just enough that they hopefully learn something from the incident rather than get angry and blame politicians for all of their problems, missing their own ability to influence/decouple from events.

I really feel sorry for everyone that is suffering, but at the end of the day it's helpful to remember a small interruption is not a bad trial run for everyone impacted.

[JohnnyH]

Both WH and Congress already said they agree on backpay, which also happened during last shutdown.

Soooo... enjoy your "free" paid vacation!

A govt worker in the bar said to "It isn't their fault, why should they [we] miss mortgage payments?" ... Do seem to think they're invulnerable to loss of future income.

[Chad]

Based on what source we look at Obama is either out of Gen X by a year or two, or just barely in. Given how "soft" the generation "science" is I don't think we can say either way on Obama.

Though, Cruz and Ryan both fall well into Gen X.

LOL, I'm trying to decide if that's your own veiled shot at Cruz and Ryan.

Howe calls Pres. Obama Gen X, in fact describes him as a archetypal.

http://www.google.com/hostednews/afp/ar ... yCKszO0Izw

Not a veiled shot at Cruz or Ryan. I'm Gen X (a little younger than Ryan). Though, I don't like either one of them. I don't dislike Ryan for wanting to clean up the finances. I just don't think he knows what he is doing with the numbers and policies.

Curz? Well, he is from Texas, that's enough for me to dislike him.

It does appear that Howe describes him as Gen X. So, the question is, "Is the system just too messed up to fix?" or "Is it going to take more time to see real progress?" I'm talking more about the administrations response to 2008 and the banks than Obamacare (probably off topic).

[Chad]

Both WH and Congress already said they agree on backpay, which also happened during last shutdown.

Soooo... enjoy your "free" paid vacation!

A govt worker in the bar said to "It isn't their fault, why should they [we] miss mortgage payments?" ... Do seem to think they're invulnerable to loss of future income.

I'm an outside consultant, so no back pay for me.

[Chad]

http://news.xinhuanet.com/english/indep ... 794246.htm

Over a decade of ignorance about soft power. Will we ever learn?

[jacob]

@Chad - When will China learn?! As far as my simple understanding goes, all they have to do is to ease off on buying treasuries with the USD they receive from their export goods and start buying yuan. But wait ... that increase the CNY/USD rate and make their exports more expensive. To me the Chinese position seems like a disingenuous attempt to take the high road while preserving their currency manipulated export subsidies. I mean, if they really want to, they can just start selling US treasures for USD, then convert USD to some other currency and start buying their treasuries ... or even commodities. (Not that they're not trying as much as possible. Witness the thwarting going on whenever they try to take over US or Canadian mining companies only to be rejected out of strategic concerns.)

The Great Game continues ...

[Chad]

@Jacob - I don't mean to suggest that this is imminent or even guaranteed to happen in the long-term (I also realize the source). I'm just suggesting that we (the US) continue to willingly give competitors and adversaries more advantages than we have too, due to our own stupidity. Big moves like the US losing it's unrivaled influence does not happen overnight or because of one event. Instead, the US position is slowly chipped away. This was my main intent.

[Felix]

China could buy Euros with dollars and import goods from Europe while also ruining a rival exporter's echange rate. Sounds like a plan. Sure beats getting delayed interest payments.

[Seneca]

http://news.xinhuanet.com/english/indep ... 794246.htm

Over a decade of ignorance about soft power. Will we ever learn?

When will we learn to quit selling the fruits of our children's work product, and ultimately their freedom, to foreign governments you mean? Based on the increasingly common argument there is not, and cannot even be, a debt problem it appears we will never learn. Except maybe by the bond market cudgel.

Now republicans are arguing the shutdown is an effective tool for hiding the failures of Obamacare. (Which in fact seems true)

"I think we have missed a big issue. I don’t think there’s any question that this whole shutdown episode has covered for the bad rollout of ObamaCare," said Rep. Tom Cole (R-Okla.), an ally of Speaker John Boehner (R-Ohio). "A lot of us warned that"

HHS spent almost $394 million over three years in contracts to build the online marketplace (referred to as an exchange). Yet from day one, Issa and Alexander wrote, "healthcare.gov has been plagued by what Administration officials initially referred to as technical glitches”

http://thehill.com/blogs/healthwatch/he ... care-flaws

[GandK]

@Felix: I don't agree with you about there not being a debt crisis. Not saying this brinkmanship is the best way to address it, but as a nation we're spending more than we earn every single year. The pols may lie, but the math does not: sooner or later, the way the US handles money will have to change.

[Seneca]

Not a veiled shot at Cruz or Ryan. I'm Gen X (a little younger than Ryan). Though, I don't like either one of them. I don't dislike Ryan for wanting to clean up the finances. I just don't think he knows what he is doing with the numbers and policies.

Curz? Well, he is from Texas, that's enough for me to dislike him.

It does appear that Howe describes him as Gen X. So, the question is, "Is the system just too messed up to fix?" or "Is it going to take more time to see real progress?" I'm talking more about the administrations response to 2008 and the banks than Obamacare (probably off topic).

Some of the most strident critics of the Boomers are Boomers, no reason to expect different of an X'er if their vision for the world is not being met by their contemporary leaders.

In some of the interviews he explains his fears over debt, likely default and the associated trauma were part of why William Strauss was working on the topic.

I think it's solveable without extraordinary pain today, but it becomes less so the worse we make it. The good news is these small interruptions will make some of the population wake up and become less financially vulnerable to governmental interruption.

Last year during the fiscal cliff discussions, it was widely predicted it'd be worse in 2013 and the President was desperately trying to get concessions where he wouldn't have to have the debt discussion again this year, despite this here we are.

How could we not be? -http://www.huffingtonpost.com/2013/01/0 ... 94164.html

This situation should not have surprised anyone. I'm glad we're here because both the population and government workers are going to need to wake up to the fact their jobs are not living annuities, and that they should take precautions for the likely much worse storms ahead.

It's probably too much to hope for, but one of the arguments I frequently make with those who favor increasing entitlement programs (up to the logical ends of universal basic income theories), is that those made most reliant on the government end up hurting the most when there is any sort of problem. We are seeing that impact right now, if we choose.

[Riggerjack]

For those who are buying into the SS scare: http://econlog.econlib.org/archives/201 ... _on_t.html

This whole thing reminds me of our local proposition 1, back in the beginning of the recession. Our county was facing a million dollar budget shortfall, due to lower property and sales taxes. This is equal to 5% of the roads budget. The 3 county commissioners, all Democrats, BTW, decided to float prop 1, which removed the limitations on property tax increases.
We have a 1% increase limitation. The ultimatum was either pass prop 1, or they would lay off 8 of our 24 sheriff's deputies.
instead, 2 out of 3 commissioners were replaced by Republicans.
While I agree with Felix that a balanced budget should be passed, and worked out in an organized way, history has shown that neither party is interested in that. So, I'll take a balanced budget, even if it's just one side flipping the other side the bird.

[Riggerjack]

Congress, in a contentious gridlock, hissing, screaming, and throwing spitballs is as close to progress as they are likely to get.

We saw in 2008-2010 what happens when they get along, I'll take gridlock, thanks. For the record, all Republican control wouldn't be any better, in my mind.

[jacob]

Meanwhile, despite being a few hours away from a technical default, markets are retracing all time highs.

It's a strange world ...

[Riggerjack]

http://www.thebigquestions.com/2013/10/ ... ing-holds/

More on the debt ceiling debacle.

http://www.thebigquestions.com/2013/10/ ... e-science/

Felix, please read comment number ten, even if you don't read the blog, supply-side Jesus is not to be missed!

[Dragline]

ROTFLMAO on comment #10

[Riggerjack]

yeah, I've recommended that blog before, not as much for the blog, as for the commenters. there are often good solid debates, and some really witty stuff in those comments.

Although, I happen to agree with a lot of what SL says, but I really like the comments even more.