Breakdown of a Government Shutdown

April 25, 2011 | Posted By: Angye M
If you've been under a rock in recent days and haven't heard, tweeted, Facebooked or been online at all, you may not know that the White House and Congress locked horns over a possible shutdown. The shutdown was supposed to happen April 9. It didn't.

Why was this? Because Congress couldn't do what the average American head-of-household can cut spending and balance a budget.

Here's the breakdown: Republicans wanted to cut about $60 billion in federal funding, while Democrats only wanted to remove about $30 billion. Here's the breakdown if the shutdown had happened:
  • More than 800,000 federal workers would have been furloughed, which would have meant no pay.

  • Military troops (and their families) would not have been paid.

  • White House and Congressional staff would have been sent home. Members of Congress would have still been paid, however.

  • National monuments and federal parks would be closed.

  • Federal income tax returns submitted after April 8 would still be processed, but delayed.

  • Washington would basically shut down. It would have been entertaining to see the president have to mow his own lawn.

  • Federal employees who are considered "non-essential" would have to turn in their Blackberry phones.

  • There would be no small business loans through the Small Business Administration.

  • There would still be checks issued by Medicare, Medicaid and Social Security.

  • The president would still receive a paycheck.

According to investment firm Goldman Sachs, a shutdown lasting more than a week would have cost the economy $8 billion in missed federal spending, and would drag down growth. National park closures were projected to cost taxpayers an estimated $32 million a day during a shutdown.

The president was quoted as saying a shutdown would devastate the economy, at a time when job growth is struggling, at best. It would also reduce public confidence in government. Wow. Ya think?

In the end, legislation was passed to fund the government through September and avoid the shutdown. The legislation will only cut $350 million in immediate spending not the $38 billion that was previously discussed. So it didn't solve the nation's debt and deficit problems, and it certainly doesn't settle the non-spending policy issues.

Here's some advice, Washington. Learn from Mrs. John. Q. Decision-Maker. She knows to not spend money she doesn't have. She clips coupons and buys on sale whenever possible. She shops around for the best deals. She buys only what's needed. She tucks a little money away for emergencies, and she plans ahead.

It's time to man up. Clip some coupons and get on with it. America can't afford this kind of budget process.

Guest contributor Angye M. writes for where you can learn more about personal and business financing options.
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April 25, 2011 | Posted By: hawks5999
Only next to someone representing a payday loan shark does Congress look comparably good.
The US Govt is not the average head of household and speaking in those terms reveals a real ignorance regarding macro economics, fiscal policy and money in general.
Since we are in a liquidity trap with interest rates at the zero lower bound and trillions of private dollars sitting on the side line, your advocation for cutting spending by the government is a recipe for higher unemployment (such as 800,000 more people entering the unemployed private workforce), massive deflation and likely another great depression.
It's easy to criticize deficit spending in a weak economy. It's harder to learn how fiscal policy, monetary policy and macro economics work. Clearly, you've taken the easy route. Clip some coupons, indeed.
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