After Cruz is done talking, if the Republicans are really serious, they’ll skip the shutdown appetizer and go straight to the main course:
There is no real comparison between the cost of a shutdown and the cost of a breach in the debt ceiling.
The two shutdowns of the Clinton years — a six-day shutdown in 1995 and a 21-day shutdown between 1995 and 1996 — cost about $1.4 billion. A more complete accounting suggests that is on the low side. Nevertheless, employees and contracts would eventually be paid. Spending by the public that did not go to national parks might go to state parks instead. The damage would be fairly minimal in the context of a $16 trillion economy, especially if the shutdown were short.
In contrast, a breach of the debt ceiling and the ensuing market gyrations might cost hundreds of billions, perhaps more.
There’s a whole mythology built up around the Clinton-era shutdowns because of the DC Press Corpse’ need to sum up entire presidencies in a few short sentences focusing on personalities. (“Bill made Newt sit in the back of Air Force 1, so Newt threw a tantrum and shut down the government, which cost Bob Dole the Presidency” is how that goes–never mind that Republicans’ big losses were two years after the last shutdown and probably related to them pushing the Lewinsky scandal, which can never be spoken about again in polite company. BTW, the Carter Administration is so far in the past that the whole of it can be summed up by the same people in two words: “Sweater – Malaise”).
So I agree with DougJ and Harry Enten and everyone else who’s pointing out that a shutdown isn’t going to be as big a deal as the self-appointed myth makers think it will be, especially since a shutdown doesn’t have a large, real economic impact. The debt ceiling is another kettle of fish, and since we’ve got some real bomb-throwers in charge in the House, it’s probably where they’re going to make things go boom.
Baud
If they don’t have the balls to force a shutdown, why would they have the balls to blow up the economy?
fka AWS
@Baud:
Well, one house of Congress *did* have the intestinal fortitude to idiotically try to shut down the government. What makes you think they would back down on the debt ceiling?
And frankly, the debt ceiling needs to go. Seriously, think about how much that fucking thing has already cost the economy.
whiskey
As a federal employee, losing my paycheck for no fucking reason whatsoever is kinda a real pain in the ass!
Cermet
So the debt ceiling will end the world as we know it …utter and complete bullshit.
Wall Street will get burned (somehow that is a down side?) and yes, debt costs will go up but the thug party will take a terrible hit as the old, white teabbagers discover what they really care about – their own greedy ass’s. They’ll rise up and kill the thugs in the next election. Where is the down side? The middle class is dying as the 0.01% makes all the gains – those fuckers are the ones who will take the bigger hit.
The world has no where else to make the gains combined with safety – China has fewer choices than that; no, the economy will not be really hurt. It would be worth the cost and remember, those cry babies the teabaggers will get the thugs to back off within days of crossing the debt ceiling.
Baud
@fka AWS:
But the assumption here is that the House will cave on the shutdown in a few days. If they do, then they will also cave on the much more serious debt ceiling issue, which the big money folks care much more about.
Alexandra
Not that I’m usually one to quote Karl Rove, he does make this point in the WSJ:
If this is true, then I would suggest that for those affected, it does represent a ‘large, real economic impact’.
fka AWS
@Alexandra:
In a sane world, every House Republican would have been fired for gross negligence of duties. This is not that world.
ET
I don’t know that I disagree all that much with the premiss that the shutdown won’t be such a “big deal” nationally but here in DC the city and the 600,000 or so who live here – not just political DC – it will be a very big deal.
As a city DC is not allowed legally to have city employees, beyond the essential (and garbage pick up and public school teachers are not considered essential workers), show up for work. In that we are no different than a federal agency. The mayor and city council may buck this and just have workers go to work anyway. Depending on how charitable Congress and the feds are, the the city could faces serious legal consequence – not just the mayor and council but maybe even potential workers though there are questions about that.
That isn’t even going into the economic consequences for the city itself and the greater region.
But then no Republicans in Congress cares about either frankly, though Issa (who I generally loathe) did try and create some mechanism for just this scenario but nothing has happened on that front.
Fargus
The shutdown wouldn’t hurt that much in a broad sense, true. But if, as seems likely, federal employees wouldn’t get paid back for the time that they were put on emergency administrative furlough, then the pain of the shutdown would be extremely targeted.
As far as the debt limit standoff goes (assuming a CR passes), here’s the message: Congress is refusing to let the government spend the money which they just authorized it to spend 3 weeks ago.
c u n d gulag
What the MSM is calling a “filibuster,” poor Mrs. Cruz calls “dinner.”
cmorenc
The GOP’s financial/business elements helped foment creation of the Tea Party Frankenstein monster to do its grass-roots foot-soldier dirty work, but find to their horror and distress that they no longer have any control or influence over it. They thought the Tea Party folks useful to rampage, tramle over, and ruin the countryside of the democrats, but now find the monster indiscriminately rampaging, trampling, and ruining their own back yards.
You created Ted Cruze. You own him, GOP financial/business faction.
Mr Stagger Lee
In my town of two military bases the prospect of soldiers and airmen’s pay not coming will go over quite well, not to mention the days off without pay for the DOD civilian workers, yet somehow thanks to Fox and the RW wurlitzer,(still going strong) It is going to be President Obama’s fault, a real double facepalm moment, when it happens.
Anya
I am seriously disappointed in the American electorate. Seriously. We already can’t count on one quarter because they’re racist fuckwits who only obsess over the black man “occupying our White House,” another quarter is composed of apathetic idiots who will vote for a D or R on the rare occasion when they’re dragged from the latest trashy reality show.
Punchy
@Alexandra: No prison guards? Yikes. Shit’ll get fugly…fast.
Another Bot Splainer
Well since a “shutdown” is kind of more like, “some of you guys go home, but some of you guys stay, and don’t turn off the electricity so the computers can still Direct Deposit” then it isn’t a big deal.
Gary K
“Rabbit – Hostage” is also popular.
Suffern ACE
@Anya: hey. A good share of those voters are that precious middle class whose demise everyone is worried about.
OzarkHillbilly
@Cermet:
My wife’s 401k is invested in Wall Street. So is my pension. Just sayin’…
blahblah
This is just stupid. It’s not about lost revenues or the cost to the government. It’s about the political impact of the suspension of benefits.
J.D. Rhoades
From the wingnuts, I’m now hearing a lot of “Isn’t Obama equally to blame? He could get the CR if he’d just agree to forego Obamacare.”
To which I reply “I don’t think anyone should be blamed for regarding the Republican cry of ‘we could have bipartisanship if you’d just capitulate entirely’ as the bullshit it is.” What they’re demanding is that the side that won the vote on the PPACA surrender or they’ll shut the government down. That’s not democracy, that’s terrorism.
TaMara (BHF)
All I can say is it’s one thing when they take Bible verses out of context and use them to justify their misdeeds, but it’s another to take Dr. Seuss and misquote him to try and prove a point.
Listen ASSHAT, the point of Green Eggs and Ham is that once you let go of your preconceived notions and actually TRY it, you end up seeing it’s good.
Cruz-control can’t even get that right. I get the feeling he looked at Wendy Davis and said to himself, “she became a folk hero and now they want her to be governor, I want me some of that.’ Again not understanding context. Seems to be a theme with these guys.
pagodat
It’s pretty annoying how here in DC we wouldn’t be allowed to spend our locally collected tax money (payable to the DC treasury, not the federal one) on city services because the Congress we don’t get to elect anyone to still has to approve our local budget (despite years of local budget surpluses and a AAA municipal bond rating).
Some of us are planning to go dump our garbage on John Boehner’s lawn if he forces us to shut garbage collection down.
peach flavored shampoo
@Punchy: What about the TSA? Can airports stay open if the TSA doesn’t show for their non-paying jobs?
Belafon
@Another Bot Splainer: As pointed out above, there is no money for government offices to run on. So, they all will be going home, and there will be no electricity to run the computers.
Just One More Canuck
@ET: Take your garbage down to Congress and dump it there
pagodat
(and it’s true, a shutdown really would stop trash collection and other city services in DC even though they’re funded by local taxes collected from people who live in DC, most of whom have less federal political influence than any of you do)
Patrick
@Cermet:
What exactly does the term Wall Street mean to you? Does it include the millions of middle-class Americans who have 401ks? It should because they will get hurt by this as the stock market goes down.
Furthermore, it is not just Wall Street that will take a hit. How about the millions of middle-class people who work for the government? With higher borrowing costs, you will see layoffs.
Rosalita
yes they want to make us cry… and thanks for the earworm :/
Mike E
@J.D. Rhoades: Economic treason as well. Too.
Smedley Darlington Prunebanks (Mumphrey, et al.)
I’m watching Ted Cruz preen on the floor of the Senate. Has there ever been a guy whose face more needs a fist implant than Ted Cruz?
This guy scares me more than any other politician of my lifetime. He’s just smart enough to really understand how to turn a bloc of adoring, reactionary, paranoid idiots into an effective and dangerous mob that could destablize our political system. Rand Paul is too dumb to do this, Rubio is too dull and awkward. But Cruz has some personality. It’s a bad one, an ugly one; but that’s just the kind that draws the people he would use as his movement. I know a lot of people have compared him to Joseph McCarthy, and to a degree, that’s a valid comparison; but McCarthy was a disorganized drunk without any real goal other than to get his name in the newspapers. Cruz is, I think, smarter, more organized, and, as far as I know, isn’t a drunk. I think he’s also a hell of a lot more messianic than McCarthy ever was. And, thus, a lot more dangerous.
Suffern ACE
Silly people without health insurance. This is mostly their fault, you know. If they would have just gotten health insurance like most decent people, Paul Ryan wouldn’t need to give us all insta-austerity.
gogol's wife
@Smedley Darlington Prunebanks (Mumphrey, et al.):
I think you misunderestimate the impact Sen. McCarthy had on American life.
Suffern ACE
@Smedley Darlington Prunebanks (Mumphrey, et al.): yeah, but unless there is a coup, Ted Cruz is staying where he is. He’s no different than any other boob in the clown car who thinks that going to a stage fair in Iowa shows political leadership but forgets to file papers to be on the ballot.
Cermet
@Patrick: The issue is you, and those people with 401’s (me, too) ARE taking huge hits as the 0.01% take the Lion share of all wealth. As they get most the rewards, they have teabaggers controlling a few thugs that prevent any and all laws that would better regulate Wall Street, improve jobs and health care here, deal with climate change, bring more jobs here, and … it goes on.
Yes, you, I and many other people will be hurt but if the thugs (lead by the 0.01% – kock brothers, included) continue to control congress for another decade we will be screwed far, far worse than if this cancer receives some treatment in 2014.
I also, don’t think reaching and failing to extend the debt ceiling is anywhere such a big deal (simply because we ARE the biggest economy in the world and there just aren’t alternatives for the world’s investors (read China).)
As for most economist – they have been stating ever since President Obama has been in office as fact that inflation is coming within the year – and they have been absolutely wrong.
Crashing the debt ceiling WILL hurt but in no manner anywhere as bad as the fear mongers claim. In the loner run, the middle class will do far better if the thugs are taken down due to that overreach.
Cacti
@peach flavored shampoo:
Those people would be deemed essential personnel and ordered to show up without pay or guarantee of future pay.
How many of them would show up is the 64 dollar question.
An awful lot of glib “a shutdown wouldn’t affect me personally so its not a big deal” here on BJ.
Keith P.
@Baud: There are those in the House whose entire point in this is to make things as bad as possible.
Cacti
@gogol’s wife:
Tail gunner Joe ruined the lives and livelihoods of thousands.
Ted Cruz has blown a bunch of hot air.
Cermet
One other point – if the debt ceiling was reached, all payments on the US debt would be handled first with money on hand and coming in. Investors would be protected for awhile; teabagers sucking off the government tit would be hurt before them.
Whether the poor federal workers would get their back pay, yeah, that will hurt (me included) but as the saying goes: “Pay us now or pay more later …” these thugs will continue to remove federal workers (privatize at lower wages/no benefits), cut their pay, and stop pay increases until and unless they are defeated at the polls.
That is only happening if the debt ceiling is reached and the Gov shuts down … . A little pain how stops the death by a thousand cuts we are currently taking.
Citizen_X
@Just One More Canuck:
Why not? Texas did. BOOM!
Just One More Canuck
@Citizen_X: Will you be here all week?
Linda Featheringill
@Citizen_X:
Texas dumped its garbage on Congress:
:-)
Linda Featheringill
But seriously, active military people will get paid and on time. Too many people think that messing with soldiers’ money is a good way to start a revolt, if not a revolution.
Forgive me for going Godwin if I mention the Brownshirts.
Mike in NC
In the not too distant future, our wingnuts will sum up the Obama Administration with “Black – Benghazi!”
cmorenc
@Smedley Darlington Prunebanks (Mumphrey, et al.):
One of the huge differences is that although Rand Paul is a true believer in glibertarian ideology, at his core he’s a deluded idealist rather than a ruthless messianic sociopath like Ted Cruz. This observation does not mean that if Paul succeeded in gaining enough power to enact his agenda, that people wouldn’t be hurt and some very ugly things wouldn’t happen, but to Cruz these consequences are a feature rather than a bug. In short, Paul is a radically deluded idealist, whereas Cruz is both an ideologue and a complete asshole who enjoys being a sadistic asshole. I could imagine having a long, civil conversation with Paul without having to suppress the urge to smash his face with my fist; I cannot imagine having even a short conversation with Cruz without having to suppress the urge to kick him in the nuts and then smash his face with my fist as he leans over in pain from the initial kick to the groin.
Smedley Darlington Prunebanks (Mumphrey, et al.)
@gogol’s wife:
@Cacti:
I see what you’re saying, but keep in mind, McCarthy took three or four years to really get into the swing of things. Cruz has only been in the Senate for, what, six months? Seven? I think his potential is rather greater than McCarthy’s. McCarthy was a more or less amoral narcissist who stumbled into his “cause” by happenstance. Once it dawned on him what he could do with his “63 communists in the State Department” crap, he ran with it. But he was never really committed to anticommunism or anything else greater than seeing his name in the paper.
Now, Cruz… Well, he has the same narcissism, cruelty and appalling character that McCarthy had, but he’s also a true believer, which is what I think makes him, potentially at least, much more dangerous.
HelloRochester
@mistermix I heart you.
pagodat
Heh, yeah, as ET mentions, in DC we are still puzzling over why the loathsome Darrell Issa keeps trying to get our city a fair shake when most Republicans are happy to put the screws to a place with plenty of near people that votes around 93% (!) for Obama and whose very name is a synonym for evil in their home districts.
Seriously, this is a place where the media mostly watches the Democratic primaries for local offices because the local Republican party is like the Washington Generals of the general elections. There was a long front page article in the local alt weekly a few months ago on the subject of “why the hell is Darrell Issa being so nice to us?” and it’s still a mystery. We’re all kind of scared he has something unspeakably nefarious in mind.
Smedley Darlington Prunebanks (Mumphrey, et al.)
@cmorenc:
You put this far better than I could have.
This, especially, is the point I was rather clumsily trying to make. Cruz is a frightfully dangerous guy.
Ash Can
@Cermet: Just because you can’t wrap your mind around what exactly a default would entail — and I’m not even being snarky here; the cascading effects would truly be enormous — that doesn’t mean the effects wouldn’t be catastrophic. Furthermore, you blithely assume that the predictions of economists on this issue must be wrong in a classic “if one, then all” fallacy, and that a public that has up to now continuously failed to assign blame to the correct people for what goes wrong in politics will suddenly wake up and know precisely who to blame in the midst of economic chaos. The bases for your conclusions are shaky to say the least.
Ash Can
@Cermet: Also, I suspect from this comment that you’re confusing the two separate issues of “government shutdown” and “government default.” They’re not the same.
Ash Can
@pagodat: Maybe he’s doing it for his BFFs in Georgetown and up Foxhall Road.
Cermet
@Ash Can: Read the link (thanks, that is useful) and they didn’t really prove much of anything. They too make the claim about inflation by guessing. That doesn’t prove much. As for investors on treasury bonds/debt, really, they would still get paid for awhile so that is a wash unless congress allowed the debt ceiling shut down to continue for some weeks – that wouldn’t happen.
Except for what I already posted, the ‘terrible’ consequences don’t appear as bad as climate warming, death of the middle class and all that is currently happening and will continue to happen (and get far worse) if the dem’s lose the senate.
There are more examples of the majority of economist getting major points about the economy wrong – look at the last bubble crash; sorry, but those people are more often wrong than right.
Cermet
@Ash Can: I know the difference and I am not.
Ash Can
@Cermet: The last economic crash was disastrous for many millions of people both in the US and abroad. The cascading effects upon global markets and economies of the default of the world’s largest economy — by all accounts of people who understand this — would most likely be worse. To hang your hat on the extremely marginal (and that’s generous) likelihood that they wouldn’t be simply because some economists didn’t (or, more likely, refused to) see the last crash coming is nothing more than wishful thinking, and irresponsible research.
A default wouldn’t just shut down the government. It would permanently ruin the lives of massive numbers of people worldwide. That’s simply the reality of global finance. It doesn’t get wished away.
Matt McIrvin
A default would be blamed on Obama. He’s President and it’d be happening on his watch. It’d be all, “the tax-and-spend liberal drove our credit rating into the basement with his foolish deficit spending. We had to intervene by standing firm on the government’s credit limit.”
(The debt ceiling isn’t a credit limit–as Obama said completely accurately the other day, it’s a promise to become a deadbeat on debts already incurred–but the name “debt ceiling” makes it sound like it is a credit limit, so people interpret it as something like that. There’s always an air of vague immorality and looming future disaster in the news stories about Congress raising it.)
This is part of what’s so dangerous about the possibility of default. Republican politicians by and large wouldn’t pay the price; the rest of us would. By throwing that switch they could tarnish Obama forever in the history books, and, out of the ensuing chaos, probably get a Republican landslide in 2014 and a Republican President elected in 2016.
chopper
@Ash Can:
hey, whatever effects there are certainly won’t be as bad as climate change, so no biggee. amirite?
chopper
@Matt McIrvin:
thing is, the GOP has been running this game for years. they’ve made the mistake of pushing the country to the brink before so now they’re tied to it as well.
i don’t know how the future would lay blame for a default but if the GOP wanted it all at obama’s feet they really should have just spiked the ball the first time.
glocksman
@Ash Can:
That, or he’s politically astute enough to realize that images of piled up garbage at kerbside looks bad on the national news.
Particularly since the lede will be ‘Federal Government Shutdown leads to trash pileups’
Either way, I am as surprised as the rest of you because Issa is a such a loathsome swine.
cvstoner
Better to let it happen now so that the Dems can bludgeon the Tea Party to death with it, than next year when they will be even more emboldened.
serena1313
Actually if Republicans shutdown the government according to Moody’s Analytic Founder Mark Zandi who testified to Congress the budget fight would be much more damaging & costlier than the 1990s which cost 0.5 percentage points of GDP growth and over $2 billion in expenses.
Today, however, a 3-4 week shutdown would reduce GDP growth by 1.4 percentage points; a two month shut-down would precipitate a recession.
Assuming the government shuts down, then what?
More financial hardship for the 47%?
Millions of Americans have been experiencing financial hardship for 5 years.
Apparently Republicans seem to believe that is not long enough.
No Republicans would rather inflict more pain on the country because they cannot get what they want!
But what they want, they cannot get anyhow because the majority of the law is funded by mandatory spending.
The only aspect that can be stripped of funding is discretionary spending for things like community health centres, school-based clinics for children, etc. (And the damn media report this as if it is business as usual!)
The ultimate price for the Republicans’ folly kowtowing to the demands of a small but radicalized faction of their base needs to come out of their hides, not the 47%.
mclaren
@Baud:
We don’t really know. We’re dealing with crazy people here. The Republicans have taken the crazy train out where the busses don’t run, and who knows what they’ll do when they get desperate.
mclaren
@serena1313:
More to the point, a debt ceiling default would likely push the U.S. economy into another recession. That would be bad news — and not only for us, but for the world.
TenguPhule
How the fuck House Republicans can eat out in DC and not get poisoned by their servers at this point is beyond me.