At the risk of sounding trite, let me just say that "here we go again."
Overnight budget talks failed to lead to a federal budget agreement, and now we're just a few hours from the first U.S. government shutdown in 15 years. The shutdown could put 800,000 federal employees out of work, while creating a nightmare for U.S. taxpayers who are regular users of government services.
As bad as that all sounds, the shutdown threat isn't the worst thing I see here - not by a longshot.
The worst thing is that - with a $14.2 trillion national debt - the part of the budget the two sides are squabbling over is miniscule. Democrats have agreed to $34.5 billion in spending cuts, while the Republicans have agreed to $39 billion for the fiscal year that ends Sept. 30.
It's a rounding error.
There are apparently a few other issues, too, but they also are relatively minor. So here these folks are, arguing over things that really don't matter - and doing so at a time when our country is struggling to rebound from its biggest financial crisis since the Great Depression. It is without a doubt an unprecedented national dilemma - and the biggest challenge - that this country will likely see in our lifetimes, especially as we claw our way back from the brink of financial oblivion.
And yet, even in the face of such high stakes, our elected leaders can't dispense with the picayune, irrelevant, self-promoting maneuvering that's filling the airwaves right now. Our leaders ought to be prohibited from making TV appearances until they actually solve this problem, but that's a story for another time.
It's no wonder Main Street has become so disillusioned with Washington - and Wall Street (to which Washington is so closely tied).
No wonder the polls I've seen suggest that a growing number of people think a shutdown would be good; that way, at least, our friends down in Washington would be blocked from doing any additional damage.
The budget fight has deteriorated to the point of sheer stupidity. Instead of worrying about what the other party is or isn't doing, the Beltway Boys would be far better served to focus their ire (if they really have any) on preserving this country's financial future: The $20 billion, $40 billion, or $60 billion in question isn't going to mean squat in the long-term scheme of things if there isn't a "long term" to deal with.
Any budget accord has got to move beyond extremely shortsighted rhetoric and address events that will unfold against the much longer context of history. Were I down there on Capitol Hill, I'd tell the members of Congress: "That's just reality guys ... do your jobs."
What I want to see is for some of these guys get it into their heads that serious reform is required - and that includes attacking some of the so-called "sacred cows" even if it means not getting re-elected. This is the real world and millions of Americans are depending on Washington to stop living beyond our means.
If it's drama they want , consider these three points:
- First, the more our leaders hack around instead of finding real, meaningful solutions, the more money we lose and the more our national wealth is eviscerated.
- The longer they take to attack our egregious overspending, the more inefficient our spending becomes and the deeper the hole our children's children's children inherit.
- And the longer they take, the bigger the debt burden that they have before them will become. But perhaps they don't want to address it at all??!!
Just look at Social Security and Medicare, for example: Current retirees are going to get what they were promised; but future generations will get a pittance. Take care of those programs, Congress, and spare us the political blathering.
As I understand it, the real travesty if the government shuts down would be the fact that members of Congress will continue to get paid get paid while our military, including those in combat zones, will not. Further, w e all should care deeply about the small business contractors that will be hit by this standstill if the checks stop flowing, and the kids that won't receive medical treatment. I think it's criminal that the Small Business Administration will effectively cease to function, while Wall Street will continue to flourish on the backs of our bailouts.
But that's just me...you've probably got your own pet peeves, too.
The important thing to remember here is that the government will still have revenue coming in even if it "shuts down" - just not enough to support the load of freebies we've built into the system.
News and Related Story Links:
- Money Morning Commentary and Analysis:
Debt Ceiling Woes: Four Moves to Make as a Government Shutdown Looms. - The Los Angeles Times:
Budget Deal Remains Out of Reach After Overnight Talks.
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.