Shut Down!

Our government, especially House Republicans, are such an embarrassment to the nation at this point it is hard to write about it.  The insanity knows no bounds as they continually play a game of chicken with the United States economy in order to get their way, even when these shenanigans are condemned by the American people.  Republicans are reportedly delusional and believe somehow the Senate will accept their absurd Obamacare attack and trying to force America's poor to stave.  The latest in this saga is a Senate vote to reject yet another house bill trying to delay Obamacare while passing a temporary funding bill that keeps the government operating until November 15th.

The Senate is expected to reject decisively a House bill that would delay the full effect of President Obama’s health care law as a condition for keeping the government running past Monday, as Senator Harry Reid, the Democratic majority leader, expressed confidence that he had public opinion on his side. Angering Republicans who lead the House, Mr. Reid kept the Senate shuttered on Sunday, in a calculated move to stall action on the House measure until Monday afternoon, just hours before the government’s spending authority runs out at midnight.

Our government is like a bunch of two year olds who need a nap.  There are two issues going on, one is to fund the government so it doesn't stop running, which looks like a sure bet not to happen and the other is to raise the debt ceiling so the United States does not default on her financial obligations.  USA Today put together a FAQ on government shutdowns and what it means to you in terms of services provided.  One interesting fact is this latest shutdown does nothing to stop Obamacare as the exchanges for the uninsured are state run and will be open for business on October 1st.

A shut down is bad enough but the debt ceiling will assuredly cause economic catastrophe.  The debt ceiling is how much the government can have in outstanding debt and not raising it causes cascading defaults since the U.S. Treasury won't be able to pay the bills.  It is not future borrowing, it is about paying for what has already been bought.  CNN also created a FAQ on the nasty consequences.  House Republicans have threatened to not raise the debt ceiling if their delay in Obamacare implementation isn't passed and signed by the President.  This is governance by hostage taking and extortion.

If a shut down happens it will be the first since 17 years ago when the GOP and President Clinton had their showdown and there is quite a history of shut downs  The thing is, who cares if there is a history for this is insane.   One would think after over 237 years as a nation, these sorts of fiendish follies would be curtailed, yet here we are with yet another manufactured crisis.  Such cutthroat politics puts the globe in a frenzy, economies in a bind and causes unneeded psychodrama, traumatizes the American people and paralyzes the nation with fear.  Just when one thinks it cannot get worse, it does.

The last threat to not raise the debt ceiling resulted in the United States receiving a lower credit rating and there are major consequences to the economy with just a shutdown alone:

Economists estimate that a two-week shutdown could cut GDP growth by 0.3 percentage points and one that lasted three-to-four weeks could cut growth by as much as 1.4 percentage points.

While most are predicting a government shutdown, there is a bit of sanity shining through the dark tumultuous clouds covering Capital Hill although sans a miracle, we wouldn't bank on these reports.  Last check Wall Street sure isn't.

Shortly after House Republicans unveiled their latest gambit targeting Obamacare in exchange for funding the government, Rep. Charlie Dent (R-Pa.) went off-script by throwing his support behind the Senate bill, which is known as a clean continuing resolution, because it continues government funding without major amendments to other legislation.

"Let's see what the Senate sends back," Dent told reporters Saturday. "If they send back another clean CR, I suspect -- again, I'm not making a decision on what's going to be on the floor -- a clean CR would likely to be on the floor at some point."

"I’m prepared to vote for a clean resolution tomorrow," he added Sunday, according to The New York Times' Jonathan Weisman. "It’s time to govern. I don’t intend to support a fool’s errand."

We'll be updating this article with the latest going ons as they happen, but odds are crazies in Congress will shut down the government.

Update September 30th, 10pm EST:

Here we are with crazies gunning for Obamacare with the Senate rejecting the House latest bill which once again tries to stop Obamacare.  It seems they don't give a damn how much economic damage and pain it causes to regular people.  The deficit is now projected to increase by $2.5 billion and GDP as mentioned, it projected to lose 0.3 percentage points over Q4 GDP and if this goes on for a month, a shutdown will slam economic growth by 1.4 percentage points.  Roughly 800,000 to a possible 1 million Federal workers will be furloughed with no pay and odds on no ability to retroactively get those lost wages back.  That's quite a massive layoff in a labor market not creating jobs.  Even if temporary this is a major blow to American workers.  Poor women with children with suffer as the Special Supplemental Nutrition Program won't be funded.  Veterans will be impacted as services shut down and some home loans would be halted.  Bottom line by crazies in the House refusing to fund the government, they will cost America much more.

There is just one silver lining in that Obama would have to delay the push through on yet another bad trade deal, the TPP.  Even getting a passport will be impacted.

Update October 1st

No surprise, the government is now shut down as House Republicans successfully hold America hostage over Obamacare.

Update October 1st, 2pm EST

Even websites are shutting down and no economic data is publicly available.  The BEA, which is our national accounts, responsible for measuring GDP and other metrics when in turn the world relies on, is completely shut down.  The Census which takes care of all sorts of daily economic and people measurements, is completely shut down.  Economic reports are already affected such as today's construction spending.  From usa.gov there is a growing list of places and activities shut down.  We think some of this is political for a website doesn't need an entire division to run, yet not having personnel around to monitor could lend itself to hacking.

Congress?  The House Republicans are still at it, using Obamacare as an excuse to take America hostage and shutdown the government and Senate Democrats along with the administration are not budging.  The issue is not just Obamacare, it is about threatening the United States economically if a minority doesn't get their way and while we're not too happy with corrupt Democrats either, on this score, this just has to stop.  Governing by putting a gun to the head of the United States is unacceptable.

Update October 4th, 2:30pm EST

A new poll shows most of America blames Republicans for the shut down and are furious.  Meanwhile politicians are really throwing around nasty insults, doing silly political posturing and getting on cable news with untrue talking points.  Nice huh, these people are so out of touch with reality they think talking points will somehow make this better.

There are now 21 House Republicans ready to vote on a temporary budget bill from the Senate that does not have the Obamacare strings attached and this is enough to pass along with Democratic House votes.  So far, House Speaker John Boehner will not bring the bill to the floor for a vote.  These defecting Republicans, assuming all Democrats vote for the bill would mean there are four more votes than needed to pass the resolution to re-open the government.

Most amusing in that some states the health exchanges are offering better insurance and way lower premiums, although in other states this isn't true and Republican voters are finding this out.  Repercussions are also happening in the Senate with other GOP Senators furious with Freshmen Tea partier Ted Cruz.  Senators must win state wide elections unlike House members who are most often in gerrymandered districts.  This means no matter how odious and corrupt, they are, no matter how nonsensical and outright crazy, in a gerrymandered district they will get re-elected.  They don't have to answer to the people for for the district boundaries were drawn like the fence of an insane asylum, capturing all votes of that nut job class and crazy people like to cluster.

The congressional map is far more gerrymandered today than it was 17 years ago during the last shutdown, when House Speaker Newt Gingrich was negotiating with President Bill Clinton. According to David Wasserman, who analyzes House races for the Cook Political Report, 79 of the 236 House Republicans serving during the last shutdown resided in districts that Clinton won in 1992. Today, just 17 of the 232 House Republicans are in districts that Obama won in 2012.

The post-2010 redistricting process combined with recent demographic shifts helped solidify the Republican majority; few GOP seats are seen as seriously endangered in the midterm elections. But those factors have also put House Speaker John Boehner in a straitjacket, forced to answer to a Republican conference that has little appetite for resolving the standoff on anything resembling Democratic terms.

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So that's the situation, dug in, under siege, by some crazies representing districts where due to past party manipulations to ensure a select type of votes, there is no way to get these nut jobs out of Congress.  Long term, America should raise hell about manipulating congressional district borders to set up a situation where the most insane people are the ones who get into office,

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Comments

No Jobs Report on Friday

This is pretty incredible but the Obama administration is saying if the government is shut down economic releases will not be issued. Now this seems like BS for this report is no doubt already calculated and it's a matter of hitting "make pdf" and hitting "make public" on their website.

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800,000 Furloughed

Federal workers are like anyone else and this is pounding them on income. About 300,000 lost their jobs in the sequester.

At 10:30pm EST, looking bad. We need some major reforms on how Congress is run and even redistricting. No district shall be formed with a percentage > 60% of one party. That's our biggest problem, they could run a corpse in many of these districts and if the party membership matches most in the local population, that corpse will be elected.

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you cant even get old data

i just tried census and BEA...both have shut down notices...you cant even look at last week's GDP report:

Due to the lapse in government funding, www.bea.gov will be unavailable until further notice. This includes access to all data and the e-File system.

We sincerely regret this inconvenience.

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rjs

holy cow

That's really bad for us then! Just updated this article on the various closures. For data, we might be able to get quite a bit from other sources. I believe the Fed is funded, separate, so open for business, although no updated or new data and not all series are available. Something.

We should take this time to dig around in the latest long term economic research and studies.

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private data

if this continues, we'll miss the BLS jobs report and factory orders; but ADP has their jobs report,, ISM and Markit are releasing PMIs, Reis is releasing 3 quarterly reports on commercial real estate sectors, & the automakers are releasing car sales...

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rjs

we'll switch to private data, have much correlation already

While I don't cover much private data, I have in the past covered almost all of these releases and we have correlations to government stats we can use. On Manufacturing ISM, already there are correlation graphs displayed.

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We're updating Shut Down! post as news develops

There has been no change, an impasse. The Atlantic posted a list of 32 House Republicans causing the shut down and we must say, haven't seen a group looking dumber than a box of rocks like this in a long time.

Scary these people are pulling 6 figures, set for life when in the private sector it's questionable they could manage a fast food restaurant.

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