US Federal Government Shutdown

[TinCow]

The shutdown is nothing. The problem is if this rolls into the debt ceiling issue two weeks from now. The Tea Party is insane enough to actually blow that one up too.

[Montmorency]

Step 1.) Shut down the government - This is as far as some of them thought it out, and for some this is a goal in and of itself. A shut-down government is the ultimate form of de-regulation. I'm sure some are even deluded into thinking it is a state of affairs they can make permanent.

Step 2.) Shift the blame. This is so smart, what they've been doing by trying to fund the government bit by bit and piece by piece. This puts the initiative with the Tea Party, makes Obama look like the bad guy (because in typical spock-like fashion he wants the whole logic-pie or nothing at all), and also starts putting dividers into the public. The military and veterans funding stuff is huge--these demographics don't need much more incentive to lean to the far right. So far the dems and Obama are falling right into the trap. The longer this goes on, and the more Obama tries to look tough, the better off the Tea Party will be.

This isn't really about the Tea Party trying to expand its popularity. They are already popular enough, especially with demographics that actually wield influence and power in society (police, military, the ultra-rich, etc.). This whole thing is about making a statement to the base, the "foot soldiers" of the Tea Party, if you will. The lower or middle-class sorts who get their news from the echo chamber, FOX or blogs or whatever. When all is said and done, the only thing that will be different from before the shut-down is that the Tea Party as a whole will be more galvanized and feel more at odds with the existing power structure.

While it will galvanize the base, I'm not so sure that it will actually add very much to it. The lines are already set.

[Papewaio]

That is fine. And would have easier to do in the post Reagan years with Communism having collapsed.

But the cosequences of hitting the credit rating will hurt the US more then Gitmo or pissing on corpses or saying how you will do whatever you want with no consequences.

This will potentially have a long term effect in diminishing the US Dollar as it will no longer be viewed as the stable one for investors to dump into when things get turbulent in the markets.

Steadier large volume currencies have started to appear and the markets might hedge with some of the money being parked in China and the EU. That is a much larger impact then most people understand.

If that parking strategy works it will be another stake in the American economy. Massive debt with increased interest rates due to a lower rating and a dollar that plunges in time of lacking confidence instead of going up.

[Lemur]

The shutdown is nothing. The problem is if this rolls into the debt ceiling issue two weeks from now. The Tea Party is insane enough to actually blow that one up too.

Well maybe if the Tea Party succeeds in destroying our credit rating, and makes the existing debt ruinously expensive, and plunges the world markets into a nosedive ...

... then maybe you'll listen to them and see they were right all along!