US gubmint shutdown + default + subprime sequel?

[Xiahou]

I think it's kinda important, in that the right would have used any tool available to delegitimize a sitting Dem president.

I see to remember liberals trying to delegitimize Bush too. It seems that for either party, the most ideologically opposed members of the opposition try to delegitimize them.... go figure.

[Lemur]

I see to remember liberals trying to delegitimize Bush too.

In fairness, the 2000 election was extraordinary. The spectacle of the Supreme Court dragging someone over the finish line ... I hope I don't see that again in my lifetime. In 2000 there were some legitimate questions about how the vote played out, in 2004 there were none. Bush won his second term fair and square. Anyone contesting his legitimacy after 2004 was, frankly, insane. (And I didn't see much point to worrying about it in 2000 either, but I'm probably just too laid back.)

This echoes my feelings about how this whole debt ceiling business played out:

The debt-ceiling debate feels like one of those tragic episodes out of the history of the fall of republics. To gain their point on a budget matter, Republicans did something unprecedented in the annals of American government. They made a bargaining chip out of the public credit of the United States. In a well-functioning democracy, certain threats are just not used, and the threat to force the country into default should rank high on the list of unacceptable threats.

Yet congressional Republicans not only issued the threat, they did so successfully. They have changed the rules of the game in ways that will have ramifications for a long time. Maybe Democrats will copy them. Or maybe Republicans will do it again. Either way, something that was once unthinkable has become thinkable. Any holder of U.S. government bonds has to feel a little less confident of the security of his or her investment after this summer's debt-ceiling episode.

[Papewaio]

The US has cut off it's nose to spite it's face as the saying goes.

If the EU was on a more even keel it would be a rush away from the US dollar to the Euro in contracts for oil, minerals and trade. The apparent silver lining for the US is at the moment the EU is already in a worse situation due to what is happening in the P.I.I.G.S. However the catchs to this thinking are:

1) EU gets it's act together and restructures their economy along more modern, accountable, transparent and long term growth including reasonable deficits and surpluses. The problems in the little piggy countries might lead to a restructure that actually puts the EU in a better long term position.
2) All this bickering has already caused a massive confidence damage in the US Congress maturity. This alone will take the luster out of the AAA ratings until they act together. If they are getting along behind closed doors, show that in public (transparency). From an outsiders point of view it looks like the scene in Blazing Saddles were the guy takes himself hostage... start voting for mature politicians (not age, but wisdom) and start telling them you are upset about it.

Places to save money:
* Get out of Iraq, rebuild and leave Afghanistan in the long term. Make better choices about were DOD money is going... just don't turn off the tap right yet, just target the flow better.
* More importantly restructure the war on drugs to being a health issue and an economic one (what is the net cost to the economy by legalising it vs sending addicts to prison). Make it only the unlicensed dealers who go to jail (make money out of the licensing, and not lose money over the chasing). In other words make it part of big Pharma and get government out of personal choices.
* Invest in aged care. It's one of those things you can't easily do by a call center on the other side of the world (there are components that can btw)...jobs for the young to look after the old.
* Raise the mandatory retirement age. Those who are smart, capable and want to work should be allowed to. After all the lifespan has effectively doubled, why not add ten years to retirement age?

[Adrian II]

2) All this bickering has already caused a massive confidence damage in the US Congress maturity.

This.

Congress approved a budget and then refused to pay for it. It's like ordering a pizza and refusing to foot the bill, hoping the pizza guy will somehow walk away and forget about it.

In the long run this has done more damage to world markets than anything else.

AII

[rory_20_uk]

This.

Congress approved a budget and then refused to pay for it. It's like ordering a pizza and refusing to foot the bill, hoping the pizza guy will somehow walk away and forget about it.

In the long run this has done more damage to world markets than anything else.

Politicians reflect their voters. Everyone wants stuff now and don't worry how it will be paid for. Get all the benefits from spending the money, and try to blame someone else for finding it. I can think of few Western countries who do not do this.

[Adrian II]

Politicians reflect their voters. Everyone wants stuff now and don't worry how it will be paid for. Get all the benefits from spending the money, and try to blame someone else for finding it. I can think of few Western countries who do not do this.

I have no doubt that all our woes can be reduced to the Heidelberg catechism.

In the mean time, we should looking for solutions instead of blaming politicians, the greedy rich, the undeserving poor and all of mankind since Adam and Eve. It's not very productive.

AII

[Koga No Goshi]

I have no doubt that all our woes can be reduced to the Heidelberg catechism.

In the mean time, we should looking for solutions instead of blaming politicians, the greedy rich, the undeserving poor and all of mankind since Adam and Eve. It's not very productive.

AII

At least in the case of the U.S. this statement would be pretty naive considering that politicians and the rich are exactly why we got stuck with the horrible deal we did. What can you do when the people you need to get votes from in Congress are going to steadfastly refuse any and every possible solution other than one that says "screw the big picture, we are going to keep the tax cuts"?

[rory_20_uk]

I have no doubt that all our woes can be reduced to the Heidelberg catechism.

In the mean time, we should looking for solutions instead of blaming politicians, the greedy rich, the undeserving poor and all of mankind since Adam and Eve. It's not very productive.

Any solutions coming over? Any Chamberlin-esque moments?

The system of government theoretically works OK, so it is the people that are elected. I can not think of a system that gives political power to those who are intelligent, knowledgeable and place the good of the country above themselves. Let me know if you can.

[Papewaio]

Well and the ability to speculators to short themselves in time for the bailouts to run out ending July.

The people who've caused a lot of the damage have also profited out of the bailouts... essentially private debt has been moved to soverign debt ie companies to taxpayers.