Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.
There’s nothing like a self-inflicted shutdown to stir things up. On Oct. 1, the government was shutdown for the first time since 1996. In the process, all nonessential government workers were sent home without pay until this is resolved. Though, maybe the essential workers should be sent home. When you can’t stop a shutdown, how essential are you.
This is all due to a spending bill that Congress can’t agree upon. Oh, and something about that Obamacare thing too. Seems a few people in Congress still don’t like Obamacare. Mostly, it’s the Republicans. So their holding the spending bill hostage and will try to use the debt ceiling which needs to be dealt with in two weeks, to further their cause.
For now, we have the Congressional version of taking their ball and going home. A few right-wing Republicans aren’t getting what they want, so everyone must suffer. Though, it’s not really everyone. It’s more like 800,000 federal workers now on forced leave, veterans who might not receive disability, and a number of other rarely discussed victims.
So what can we expect from all this? My best guess is this will drag on until the debt ceiling needs to be dealt with in a couple of weeks. At that point, the hard decision needs to be made on who will cave first on the spending bill and then the debt ceiling and give up this stupid charade. Being politicians, caving on their ideals should be easy. They just need a few weeks to come up with an excuse to save face.
And Your Money
So how will the shutdown affect your money? If this drags on long enough, eventually it will seep into the economy. Any negative effects will be temporary and quickly offset once a deal is reached. Don’t overreact and sell everything.
In fact, you’re better off doing nothing. If you don’t believe me, go back and look at the market performance after every other shutdown and debt ceiling threat in the past. If that doesn’t convince you, are you seriously making financial decisions based on what some crazy politicians might do?
- How Many ‘Greater Fools’ Does It Take to Make a Bubble? – too much information about what others are doing might be bad.
- Actually, the United States Has Defaulted - a small-scale version of what would happen if the U.S. defaulted.
- Bond Risk: A Theory of Relativity - a reason to own some bonds.
- Dog Nearly Fetches Prestigious Financial Advisor Honor – it’s like buying your own trophy for winning nothing.
- How Brazil’s Richest Man Lost $34.5 Billion – good story for when you need to lose a whole pile of money.