by Bill McBride on 4/06/2011 02:30:00 PM
Wednesday, April 06, 2011
• As I noted back in January, the deficit and the debt are real issues, but the "debt ceiling" debate is political posturing. (If you follow the links back a few years, this was originally making fun of Democrats).
I still believe a shutdown will be averted, but if not, here is an article from Michael Shear at the NY Times on the possible consequences: White House Says Shutdown Would Harm the Economy (pay wall)
Administration officials said that nearly 800,000 federal workers would probably be told to stop working if a deal was not reached in the next two days. Small business loans would stop. Tax returns filed on paper would not be processed. Government Web sites would go dark. And federal loan guarantees for new mortgages would become unavailable.This is a real concern, but I don't believe anyone in Congress is THAT stupid.
Speaking to reporters on a morning conference call, a senior administration official said the cumulative impact of the shutdown “would have a significant impact on our economic momentum.”
• Unfortunately the Paul Ryan budget plan is riddled with errors. Here are the original projections (they have been changed without changing the plan - not a good sign). The plan has many unrealistic projections (unemployment, residential investment, and more). Bad math ruins the whole plan, and it isn't even a starting point for discussion.
Also, as I noted earlier in the comments, I'm in the "over 55" group that will not see a change to Medicare under Ryan's plan. I object to this vote buying scheme (older people vote). Whatever plan is good enough for those 25 years old, 35 years old and 45 years old - is good enough for me. I believe in shared sacrifice, and I refuse to ask younger workers to take less while I get more. I understand this plan is DOA if it applies to older workers, then so be it.
Aren't there any leaders in America who can talk shared sacrifice to solve a problem?