British_Rover
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So what month do you want in the pool? Or maybe a better question is how many weeks after Congress is sworn in on on Jan. 3rd. do you want to pick in the pool?
I wouldn't even give them till early summer before a shutdown is being threatened.
The fiscal year ends on October first so maybe a full fledged shutdown right after that week.
There is going to be a fight on the debt ceiling during the beginning of the year.
Back in October not a single Republican voted to raise the debt ceiling.
Let us be clear the US does not have a short term debt or deficit problem If we did short term and medium term treasury rates would be higher then they are now and rising fast. Even longer term T-Bills are still pretty low. No one in the bond market is actually worried about the US even if some people are saying so.
Full 2010 Treasury rates
As you can see 10 year rates started the year in the high 3.XX% to low 4.XX percent range. By the spring they were in the mid three to low three percent range and now they are well into the mid to upper two percent range.
Back in May of last year you had similar rates in the mid three percent range.
Even at the worst the financial crisis when the world was going to end the ten year rate didn't climb much above four percent.
So no short term debt or deficit problem no matter what certain people say. Yeah it is higher then we would like but as GDP grows with the recovery and inflation starts again some of that short term debt is going to be wiped out. Remember the Feds target inflation rate is two percent and we are under that.
In 2009 we actually had real deflation for a while and that is bad. Deflation is so, so, so, much worse then inflation I can't even imagine how to describe it.
We do have a potential medium term debt and deficit problem. Medium term defined as greater then ten years out and long term defined as greater then 20 years out.
Medicare is fine until about 2029 currently and Social Security is fine without reducing benefits until 2037. We absolutely have a long term debt and deficit problem but that is almost entirely related to medicare costs.
If medical costs keep rising at the rate they are now the only thing the federal gov't will have enough money to pay for is medicare in the long term. Remember currently think of the federal gov't, at least from a dollars standpoint, as an insurance company with an Army. Defense expenses and then other entitlement expenses, Social Security, medicare/medicaid etc.are the vast majority of the federal budget.
http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png
There needs to be a fight about long term deficits and spending will have to be cut along with some taxes raised. There is just no way around it we can't cut enough out of the budget to cover those expenses.
So why do I think there will be a gov't shutdown next year?
Simply answer about half the blue dog moderate Democrats are gone replaced by mostly conservative Republicans. Some of those Republicans are going to be tea partiers and many of those have pledged to cut and cut and cut without compromise.
The Blue Dog caucus went from about 49 to 25 after the election.
Some of them have even gone after the defense department as a basis for cuts and been warned off by Republicans. Ron Paul and Barney Frank are all for doing that too.
The Republicans are going to be much more conservative then they were previously as they have already kicked out most of their moderates during the past two election cycles or during primaries. The Democrats just lost 25 of their most conservative members plus many other moderates during this past election.
Now you have two parties with larger ideological gap then before and as I said previously many current and freshly elected Republicans were already saying no compromise even before the election.
All of this of course is another great argument for a viable third party to force the two major parties to work together more. The exit poll data suggests that voters on a whole don't really care for Republicans or Democrats but they want the other guy right now and the other guy is the Republicans at the moment. If they had another viable other guy to vote for things would be better.
The problem is I don't see that happening till the party realignment finally happens in two to three more election cycles.
I wouldn't even give them till early summer before a shutdown is being threatened.
The fiscal year ends on October first so maybe a full fledged shutdown right after that week.
There is going to be a fight on the debt ceiling during the beginning of the year.
Back in October not a single Republican voted to raise the debt ceiling.
Let us be clear the US does not have a short term debt or deficit problem If we did short term and medium term treasury rates would be higher then they are now and rising fast. Even longer term T-Bills are still pretty low. No one in the bond market is actually worried about the US even if some people are saying so.
Full 2010 Treasury rates
As you can see 10 year rates started the year in the high 3.XX% to low 4.XX percent range. By the spring they were in the mid three to low three percent range and now they are well into the mid to upper two percent range.
Back in May of last year you had similar rates in the mid three percent range.
Even at the worst the financial crisis when the world was going to end the ten year rate didn't climb much above four percent.
So no short term debt or deficit problem no matter what certain people say. Yeah it is higher then we would like but as GDP grows with the recovery and inflation starts again some of that short term debt is going to be wiped out. Remember the Feds target inflation rate is two percent and we are under that.
In 2009 we actually had real deflation for a while and that is bad. Deflation is so, so, so, much worse then inflation I can't even imagine how to describe it.
We do have a potential medium term debt and deficit problem. Medium term defined as greater then ten years out and long term defined as greater then 20 years out.
Medicare is fine until about 2029 currently and Social Security is fine without reducing benefits until 2037. We absolutely have a long term debt and deficit problem but that is almost entirely related to medicare costs.
If medical costs keep rising at the rate they are now the only thing the federal gov't will have enough money to pay for is medicare in the long term. Remember currently think of the federal gov't, at least from a dollars standpoint, as an insurance company with an Army. Defense expenses and then other entitlement expenses, Social Security, medicare/medicaid etc.are the vast majority of the federal budget.
http://en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png
There needs to be a fight about long term deficits and spending will have to be cut along with some taxes raised. There is just no way around it we can't cut enough out of the budget to cover those expenses.
So why do I think there will be a gov't shutdown next year?
Simply answer about half the blue dog moderate Democrats are gone replaced by mostly conservative Republicans. Some of those Republicans are going to be tea partiers and many of those have pledged to cut and cut and cut without compromise.
The Blue Dog caucus went from about 49 to 25 after the election.
Some of them have even gone after the defense department as a basis for cuts and been warned off by Republicans. Ron Paul and Barney Frank are all for doing that too.
The Republicans are going to be much more conservative then they were previously as they have already kicked out most of their moderates during the past two election cycles or during primaries. The Democrats just lost 25 of their most conservative members plus many other moderates during this past election.
Now you have two parties with larger ideological gap then before and as I said previously many current and freshly elected Republicans were already saying no compromise even before the election.
All of this of course is another great argument for a viable third party to force the two major parties to work together more. The exit poll data suggests that voters on a whole don't really care for Republicans or Democrats but they want the other guy right now and the other guy is the Republicans at the moment. If they had another viable other guy to vote for things would be better.
The problem is I don't see that happening till the party realignment finally happens in two to three more election cycles.