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Home Publications Blogs Beat the Press October 17th and a Government Shutdown Don't Mix

October 17th and a Government Shutdown Don't Mix

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Tuesday, 01 October 2013 03:58

The national media continue to express their disdain for logic and arithmetic when they warn that we will face a debt ceiling, in addition to a government shutdown, on October 17th. That one doesn't make sense.

The government shutdown means that much of the spending that would otherwise be going to support the $1.2 trillion discretionary portion of the federal budget is not being made. As a result, the government's borrowing needs will be considerably lower over this period. Depending on how much spending goes out the door, it is possible that the government is not even borrowing at all during the period of shutdown.

This means that the shutdown will extend the date at which a debt ceiling will be reached. That would change if the standoff is settled and all the delayed payments are made retroactively. However, if the government remains shut for several weeks, the debt ceiling deadline will be pushed out past the October 17th deadline indicated by the Treasury Department.

Comments (4)Add Comment
Pareto Patriotism: The Only Way to Save America From The Bitter End
written by Last Mover, October 01, 2013 6:48

The end is still near. Dean Baker cannot defuse it with the usual arithmetic. If America doesn't collapse from default in 2 weeks then it will collapse in 4 weeks and so on. If the debt limit is lifted and Obamacare is restored then America will collapse from that as well.

A slow death is not better than a quick one. Get it over with. Go to your nearest health exchange and get a subsidized insurance voucher for health care.

If the doctor refuses to accept it on grounds the government will not pay its share past the debt limit, move to Alaska, wait for an ice floe to break off from global warming and do your patriotic duty to save the country by eliminating your personal burden on the debt and Obamacare.

Pareto patriotism. Make everyone else better off and no one worse off except yourself with an early sacrificial exit.
Shutdown doesn't save much money
written by Peter T, October 01, 2013 11:03
Does the government really have so much lower expenses during the current shutdown, to delay hitting the debt ceiling significantly:
1. The biggest expenses like social security, military, and medicare are not affected.
2. Shutdowns seemed to have cost actually more than running the government in the past (which might be due to back pay, etc.)
Shutdown Numbers
written by JayR, October 01, 2013 11:12
Social Security, Military, and payments on the debt and all the other essential parts of the government seems like it might make up a fairly large percentage of the budget. It would not surprise me if the amount of savings from the limited shutdown we are currently having does not move the Oct 17th out very far into the future. I just don't know the numbers that well. I do know someone that should be able to put some rough figures together. So Mr. Dean Baker, give me a very ball park guess, how many days are you calculating the Oct 17th date should be moved? Closer to 10 days or closer to two months? If it turns out to be one or two days I think you will have to give the press some slack. This would be less misleading then the press normally is.
Treasury Secretary Lew Says Government Shutdown Won"t Help Debt Crisis by Much
written by Robert Salzberg, October 02, 2013 5:38
If the 800,000 federal employees got paid a $100,000 on average, that would be around $1.6 billion a week in savings. Not nothing, but not much compared to the up to $60 billion in daily bills that can hit the Treasury. Payroll savings also depends on the cycle of the pay periods relative to the government shutdown. Anyhow, even with lots of other saving by closing non essential services, a government shutdown will not avoid default for very long according to Treasury Secretary Lew.

http://thehill.com/blogs/on-th...debt-limit

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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