Will the U.S. Economy Collapse Without Government Debt?

[Manchot]

If the U.S. government shuts down, will federal funding for all research dry up as well?

 

[twofish-quant]

If the U.S. government shuts down, will federal funding for all research dry up as well?

Apples and oranges. If there is a government shut down, then it means that there is going to be a slight delay in issuing the checks, but the money that has already been paid will continue to flow.

 

[Vanadium 50]

That's not necessarily true. The agencies have been known to rescind spending authority. It's also possible that the national labs will all shut down as well.

 

[jmason52]

This may hijack this thread, and for that, I apologize in advance.

As a government contracting officer, I want to post my "Power to the People" rant and get it over with. Both sides of the Congressional aisle are playing partisan politics with this budget, just like they do every year. I mean, its not like its a surprise that they have to approve an annual budget, now is it? Neither side is actually trying to reduce spending; they are only cutting those programs who don't have the strength and glitz to fight for themselves. Spending can only be curtailed, and a reasonable budget developed when they are willing to: end the three useless wars currently bleeding us dry; seriously investigate and cut the over-bloated defense budget; end farm and oil company subsidies; and, pay attention to the other entitlement programs.

This will never happen. Why? Because it would not be in their own interests.

Fine. Shut down the Government, but by God, furlough the useless politicians as well. No, on second thought, make them work to fix their mess but don't pay them a dime until it IS fixed. Then, in the next elections, vote them all out.

Rant over. And in the immortal words of Michaeleen O'Flynn (The Quiet Man): "I thank you!"

 

[Andy Resnick]

If the U.S. government shuts down, will federal funding for all research dry up as well?

Yes- the government will stop paying bills. Also, any 'obligated' funds (i.e. approved awards) won't start being paid- for example, my proposal was approved (with a proposed start date of May 1), but until the money is freed up, nothing is getting funded.

Government workers (civil servants at government labs etc) will not be allowed to work as the facilities will be closed. Not clear about the contractor workforce, but if they are not allowed on-site, they may be put on furlough.

Then there's social security checks, medicare payments, welfare payments... all that stops.

 

[Norman]

Government workers (civil servants at government labs etc) will not be allowed to work as the facilities will be closed. Not clear about the contractor workforce, but if they are not allowed on-site, they may be put on furlough.

For NASA, contractors and grantees will not be allowed back on base. During the last shutdown in the 90s, one of the guys in our research group left his heart meds on base after the shutdown. It was like pulling teeth to get onto base and get his meds. Complete fiasco.

 

[Topher925]

Yes- the government will stop paying bills. Also, any 'obligated' funds (i.e. approved awards) won't start being paid- for example, my proposal was approved (with a proposed start date of May 1), but until the money is freed up, nothing is getting funded.

I've been trying to get a spot at a national lab this summer working on a project and this seems to be exactly what is happening. Chances are I'll be working somewhere else.

 

[Al68]

Yes- the government will stop paying bills. Also, any 'obligated' funds (i.e. approved awards) won't start being paid- for example, my proposal was approved (with a proposed start date of May 1), but until the money is freed up, nothing is getting funded.

Government workers (civil servants at government labs etc) will not be allowed to work as the facilities will be closed. Not clear about the contractor workforce, but if they are not allowed on-site, they may be put on furlough.

Then there's social security checks, medicare payments, welfare payments... all that stops.

Total nonsense. They simply use the words "government shutdown" fraudulently just like in the past. What it really means is that government will operate (including SS checks) with a grossly over-bloated budget, just a little less over-bloated than many desire.

It's just a fraudulent scam to use the words "government shutdown" to refer to government spending "only" the far too much revenue it takes in, instead of far more than that.

What other entity would claim to be "shutdown" simply because it only spent what it took in?

 

[BobG]

Yes- the government will stop paying bills. Also, any 'obligated' funds (i.e. approved awards) won't start being paid- for example, my proposal was approved (with a proposed start date of May 1), but until the money is freed up, nothing is getting funded.

Government workers (civil servants at government labs etc) will not be allowed to work as the facilities will be closed. Not clear about the contractor workforce, but if they are not allowed on-site, they may be put on furlough.

Then there's social security checks, medicare payments, welfare payments... all that stops.

The government can't stop paying bills unless it's willing to pay any penalties associated with those missed payments. Which is why it's unlikely for social security checks, medicare payments, etc to stop.

All non-essential federal employees will be laid off and stop receiving pay. Traditionally, the government has gone ahead and paid them retroactively even for the days they were laid off.

Essential federal employees will still have to work, either with or without pay, depending. Traditionally it has been without pay, with the government paying them retroactively after the shutdown is resolved. During the 1995/1996 shutdown, military personnel did continue to receive pay. In some previous shutdowns, they had to work with no pay, the same as any other essential federal employees (these shutdowns are why military credit unions are so popular with the military).

What happens to contractors working for the federal government depends on the terms of the contract. As I said before, a government shutdown doesn't mean the government gets to renege on every contract or obligation it has made. Contractors providing essential services will continue to work and, most likely, continue to get paid. Some contractors will get laid off. Unlike federal employees, contractors are unlikely to receive any pay for the time they didn't work.

All non-essential services that the government can legally stop paying for basically stop.

I don't know which threat of government shutdown we're on now, but I still don't know whether I would continue to work through a government shutdown or not. The story keeps changing with each threat of shutdown. At one time, everyone in my organization except me would be sent home. At another time, they weren't so sure I'd continue working since I officially belong to the same folks that would get sent home. The current story is that all of us will probably continue working just because of how our contract with the federal government is worded (in other words, if the work stoppage is due to the government's actions, the government could be obligated to pay our company regardless of whether we work or not).

 

[Andy Resnick]

Total nonsense.

The government can't stop paying bills unless it's willing to pay any penalties associated with those missed payments. Which is why it's unlikely for social security checks, medicare payments, etc to stop.

I'm going by my recollections of 1994, when I was a grad student next door to Redstone Arsenal. Yes- "essential" personnel were kept on, but otherwise "much of the federal government—including agencies, museums, national parks, and research laboratories— ground to a halt. Some 800,000 government employees deemed "nonessential" were sent home." (http://legal-dictionary.thefreedictionary.com/Government+shutdown). I don't think that shutdown was long enough to affect social security payments.

 

[Al68]

I'm going by my recollections of 1994, when I was a grad student next door to Redstone Arsenal. Yes- "essential" personnel were kept on, but otherwise "much of the federal government—including agencies, museums, national parks, and research laboratories— ground to a halt. Some 800,000 government employees deemed "nonessential" were sent home." (http://legal-dictionary.thefreedictionary.com/Government+shutdown). I don't think that shutdown was long enough to affect social security payments.

Put another way, the overwhelming majority of Americans would have never known there even was a so-called "government shutdown" if they hadn't been told about it on the news.

Because there was no government shutdown in any non-fraudulent sense, just a reduction of (non-essential) services.

 

[BobG]

Put another way, the overwhelming majority of Americans would have never known there even was a so-called "government shutdown" if they hadn't been told about it on the news.

Because there was no government shutdown in any non-fraudulent sense, just a reduction of (non-essential) services.

It definitely was a niche crisis. In places like Washington DC, it was disaster for companies dealing with the federal government as about 20% of federal contracts were suspended during the shutdown (a percentage that puts AI's comments in perspective). In most parts of the country, it only had an impact on people if they were veterans or belonged to some other niche group - just enough so people could see an impact in their local areas without being affected themselves.

If I remember correctly, that may have been a merciful fact for the Republicans. Just the effects reported in the news severely damaged Republicans. That was a situation where Republicans controlled both the House and Senate and Clinton played a direct part in the shutdown by vetoing Congress's spending bill. Clinton's poll numbers did drop during the shutdown, but his quickly recovered, while Dole was starting his Presidential campaing in a hole that would never go away completely. Part of that may have been the fact that disgruntled Dems had no real alternative while disgruntled Republicans could turn to Perot.

In a Congressional dispute where the bill can't pass both the House and the Senate, it will be mostly Congress that's seen as inept - and Tea Party Republicans seem to be set up to take the brunt of the popular displeasure. Obama will be largely untouched since there was a never a bill that made it to his desk to be vetoed or signed. It's good for any Republican candidates outside of Congress (governors, former governors, etc) that can avoid being linked to Tea Party Republicans.

 

[BobG]

Looks like they'll take it down to a thrilling end.

The most frustrating thing about a possible shutdown is setting a deadline for midnight tonight. If they fail to reach agreement, people possibly affected will have to wait until Monday morning when they show up for work to find out whether or not they'll be working during the shutdown.

At least for me, anyway. I have enough vacation to cover me for a few weeks, but I'd like to go somewhere if I'm burning up vacation time. Waiting until Monday just wastes 3 days.

Funny, but I couldn't care one way or the other whether they include federal money for abortions. It's not very high on my list of government functions.

 

[BobG]

This may hijack this thread, and for that, I apologize in advance.

As a government contracting officer, I want to post my "Power to the People" rant and get it over with. Both sides of the Congressional aisle are playing partisan politics with this budget, just like they do every year. I mean, its not like its a surprise that they have to approve an annual budget, now is it? Neither side is actually trying to reduce spending; they are only cutting those programs who don't have the strength and glitz to fight for themselves. Spending can only be curtailed, and a reasonable budget developed when they are willing to: end the three useless wars currently bleeding us dry; seriously investigate and cut the over-bloated defense budget; end farm and oil company subsidies; and, pay attention to the other entitlement programs.

This will never happen. Why? Because it would not be in their own interests.

Fine. Shut down the Government, but by God, furlough the useless politicians as well. No, on second thought, make them work to fix their mess but don't pay them a dime until it IS fixed. Then, in the next elections, vote them all out.

Rant over. And in the immortal words of Michaeleen O'Flynn (The Quiet Man): "I thank you!"

I wonder how our local Congressman (R-Doug Lamborn) will fair next election, seeing as how we have 5 military bases in our area and a lot of federal employees could be staying home.

I don't think it's coincidence that one of the sticking points is funding for NPR, seeing as how a bill to defund NPR has been the highlight of Lamborn's career so far. I imagine he'll be a target in the 2012 elections.

 

[Evo]

There is a website that discusses what will happen.

http://www.governmentshutdown.org/how_public_affected_government_shutdown.html

 

[Jimmy Snyder]

There is a website that discusses what will happen.

http://www.governmentshutdown.org/how_public_affected_government_shutdown.html

Thanks Evo, that explains a lot. So it turns out that the govt will still operate during the shutdown. This is a lot worse than I had anticipated.

 

[Evo]

Thanks Evo, that explains a lot. So it turns out that the govt will still operate during the shutdown. This is a lot worse than I had anticipated.

Lol.

Yeah, I had read that the IRS would shut down, since I owe money, I was looking forward to the shutdown. This says taxes are still due April 15th, but if you're due a refund then you'll have a delay.

 

[fss]

Not clear about the contractor workforce, but if they are not allowed on-site, they may be put on furlough.

They won't be allowed on site, and will not be able to bill the government for work they didn't do during the shutdown. It's not a good situation to be in, being a contractor for the government right now.

All non-essential federal employees will be laid off and stop receiving pay.

"Laid off" is not the correct term. "Furloughed."

Essential federal employees will still have to work, either with or without pay, depending. Traditionally it has been without pay, with the government paying them retroactively after the shutdown is resolved.

Usually the difference between "excepted" and "non-excepted" personnel are that those that have to work are guaranteed their retroactive pay, while those that don't work are not.

 

[Al68]

Funny, but I couldn't care one way or the other whether they include federal money for abortions. It's not very high on my list of government functions.

Not very high in the list of enumerated powers in the constitution, either. But what's especially despicable and fraudulent is that Dems are saying "agree to give taxpayer money to Planned Parenthood or we won't agree to pay servicemen", then accusing Republicans of blackmail for saying no deal.

It's almost as if Dems are under the delusion that their agenda is the default government action in case they can't reach agreement. While their agenda not being funded by taxpayers would constitute some positive action of government. They have hospitals for that.

 

[Al68]

Lol.

Yeah, I had read that the IRS would shut down, since I owe money, I was looking forward to the shutdown. This says taxes are still due April 15th, but if you're due a refund then you'll have a delay.

You didn't think they would shutdown the collection side of the IRS did you?

 

[Norman]

They won't be allowed on site, and will not be able to bill the government for work they didn't do during the shutdown. It's not a good situation to be in, being a contractor for the government right now.

This is not exactly correct either. What matters is if the the money for the work was obligated prior to the shutdown or not.

Contractors may continue to perform under contracts for work obligated prior to the shutdown, provided performance does not require the use of shutdown NASA facilities or other Government support which would be funded by a lapsed appropriation, including administrative, oversight or other actions required of civil servants. For example, work on certain missions in development may continue if performance does not require the use of NASA civil servant or technical resources or other Government support.

From: http://www.spaceref.com/news/viewsr.html?pid=36646

 

[turbo]

Planned Parenthood isn't all about abortion. They serve poor people (especially women) who need access to pap screening, breast cancer screening, rape counseling, general health issues, contraceptives, diagnosis and treatment of STDs, and yes, family planning. Having children is expensive to the parents, and to society at large (all of us taxpayers) if the parents can't properly provide for them.

"Planned Parenthood=abortion" is a dangerous game for the GOP to play. It plays to the religious right and to the Tea Party, but it doesn't conform to reality, including all the good that PP does, especially in poorer communities.

Disclaimer: My sister is a health-educator for a regional health center in rural Maine. She spends a great deal of her time educating young women and helping them establish a mind-set that avoids unwanted pregnancies. She also works on community outreach, and teaches prenatal health and Lamaze, as well as helping single mothers get in contact with agencies that can help with nutrition, etc.

 

[drankin]

I kind of like the idea of all non-essential gov't services shut-down... permanently. Being they aren't "essential" we could live without them and save... trillions?

 

[turbo]

Is it "essential" that we keep so many of our soldiers in harm's way trying to build democracies in places that seem to morph into kleptrocracies as soon as US money is available? Let's wind down the wars, and start saving some real money!

 

[Evo]

You didn't think they would shutdown the collection side of the IRS did you?

One can always be hopeful. If they're not there to answer my questions, how am I supposed to file?

 

[Jimmy Snyder]

If my wife and I can't come to an agreement on the household budget, can I skip my son's allowance this week?

 

[drankin]

Is it "essential" that we keep so many of our soldiers in harm's way trying to build democracies in places that seem to morph into kleptrocracies as soon as US money is available? Let's wind down the wars, and start saving some real money!

I'm with you. A gradual phase out of all "non-essential" government. Including military occupations.

 

[Al68]

Planned Parenthood isn't all about abortion. They serve poor people (especially women) who need access to pap screening, breast cancer screening, rape counseling, general health issues, contraceptives, diagnosis and treatment of STDs, and yes, family planning. Having children is expensive to the parents, and to society at large (all of us taxpayers) if the parents can't properly provide for them.

"Planned Parenthood=abortion" is a dangerous game for the GOP to play. It plays to the religious right and to the Tea Party, but it doesn't conform to reality, including all the good that PP does, especially in poorer communities.

That's just silly. The GOP isn't saying "Planned Parenthood=abortion". They are saying "the aspect of Planned Parenthood that we object to=abortion".

But I'm pretty sure you knew that. Abortion, not breast cancer screening, is the reason the GOP opposes their funding, despite absurd claims to the contrary by the left.

 

[turbo]

One can always be hopeful. If they're not there to answer my questions, how am I supposed to file?

I used an IRS-recommended electronic filing outfit this year. I got my state refund back in no time, but the Fed refund was delayed for weeks because of an error made by their preferred software. Plus, it missed an additional refund of over $1000. I would have preferred to file paper returns, but the Feds have opted not to print and mail the forms required, and good luck finding them anywhere.

 

[drankin]

If my wife and I can't come to an agreement on the household budget, can I skip my son's allowance this week?

You have my permission :)

 

[turbo]

But I'm pretty sure you knew that. Abortion, not breast cancer screening, is the reason the GOP opposes their funding, despite absurd claims to the contrary by the left.

Despite the "absurd claims" Federal funds are not used to provide abortions, nor have they been for decades. Ever hear of Henry Hyde?

The Hyde Amendment
After Roe v. Wade decriminalized abortion in 1973, Medicaid covered abortion care without restriction. In 1976, Representative Henry Hyde (R-IL) introduced an amendment that later passed to limit federal funding for abortion care. Effective in 1977, this provision, known as the Hyde Amendment, specifies what abortion services are covered under Medicaid.

Over the past two decades, Congress has debated the limited circumstances under which federal funding for abortion should be allowed. For a brief period of time, coverage included cases of rape, incest, life endangerment, and physical health damage to the woman. However, beginning in 1979, the physical health exception was excluded, and in 1981 rape and incest exceptions were also excluded.

In September 1993, Congress rewrote the provision to include Medicaid funding for abortions in cases where the pregnancy resulted from rape or incest. The present version of the Hyde Amendment requires coverage of abortion in cases of rape, incest, and life endangerment.

http://www.prochoice.org/about_abortion/facts/public_funding.html

 

[fss]

What matters is if the the money for the work was obligated prior to the shutdown or not.

"This is not exactly correct either." Even if funds are obligated beforehand, it the contract officer representative for the agency is designated as non-excepted and cannot provide adequate oversight, contractor furlough is authorized.

 

[Al68]

Despite the "absurd claims" Federal funds are not used to provide abortions, nor have they been for decades.

Did you misinterpret my post as claiming otherwise?

But in reality, if I give a drug addict $5 to buy a meal, the drug addict buys the meal with it, then uses another $5 he got somewhere else to buy drugs, I can't claim I didn't support his drug habit because "my" $5 paid for the meal, not the drugs. Dollars, being a fungible commodity, cannot logically be separated that way.

That being said, even if we "assign" the tax dollars to the breast screenings and private donations to the abortions, possibly under the assumption that Planned Parenthood would prioritize abortion funding if all they have is private funding, the fact still remains that abortion, not breast cancer screening, is the reason GOP opposes their funding.

 

[Jimmy Snyder]

A: Give us money for breast cancer screenings or we won't be able to do them.
B: No. You'll just spend it on abortions.
A: There's no fear of that. We already have money for abortions.

 

[WhoWee]

I kind of like the idea of all non-essential gov't services shut-down... permanently. Being they aren't "essential" we could live without them and save... trillions?

Carefueful drankin - you might be recruited by the Tea Party to run for office.

This entire debate of $33bn or $38bn or even $100,000,000,000 is absurd when the annual deficit is over $1,500,000,000,000 - DRASTIC action is required ASAP (IMO).