Tuesday, February 22, 2011

Guvmint Shutdown?

FYI. On Sunday I was talking with someone who has significant and relatively deep contacts with staffers for Senators and Representatives in Washington, D.C. This person relates that the same story is being told by staffers for both the blue favor and red flavor of politician - that each side thinks it has the best chance to "win" in the court of public opinion if a government shutdown occurs and that they are convinced we will see a government shutdown, possibly a protracted one, come March 4th.

I'm not sure where mood will be, as measured by the stock indices, come early March, but it will be a good test of down deep the anger runs to see how long this shutdown, should it even occur, lasts.

It lends credence to this story making the rounds of the internet (h/t Karl Denninger):

It's Certain: A Government Shutdown Is Coming In Just Two Weeks
by Joe Weisenthal, Business Insider
Barring some sort of deus ex machina, it seems certain that a government shutdown is coming in just two weeks (March 4, when the existing temporary funding bill runs out)...

Granted this is second hand, so take it for what it is worth. If you are expecting a refund from the IRS and have not filed yet, you may already be too late to get your taxes filed with enough time to receive the refund...


David said...

All of this sideshow seems moot to me; the real issue is the interest rate on Treasuries.

As long as the US mimics Japan's experience, borrowing will potentially decline in the private sector as it moves completely to the federal level and ramps beyond anyone's wildest imagination (as has occurred in the land of the rising sun).

Until the dam breaks there, I don't expect changes of lasting or notable significance.

As Bonner says, that which can't be paid won't be paid. But the game of musical chairs continues as chairs disappear, and one day the music will stop and the masses of people will discover that there's nowhere to sit.

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