The Coming Economic Crisis?

A week ago when I wrote the post about how the partial government shutdown would affect the average US citizen I never thought I would be writing this post this week. I must start out by saying I still do not think the things I am going to describe are going to happen, but they are now at least in the realm of possibility. Sometime around October 17th of this year the federal government will run out of money, again. Let me explain. Imagine that you have no money in your wallet, your bank balance is zero, your credit cards are all maxed out, and you cannot even find any loose change in your couch. This is the situation in which the government will find itself in a few days. When this has happened in the past, Congress  just voted to increase their "credit card" limit and thus postponed the problems.

This time it may not be so easy. The Republicans have chosen this time to make a stand against Obamacare. After trying to completely defund Obamacare and failing, the Republicans backed up and wanted to delay the individual mandate. Large corporations have been granted a delay so everyone should. Laws should apply to everyone equally.

The Democrats have said that they will accept no compromise on Obamacare. So we have the shutdown. The shutdown would have been fine except for the way it is being implemented. For example military golf courses are still in operation but military grocery stores called commissaries are closed (reported in Bloomberg). The closing of the WWII memorial and the arrest of veterans trying to pay their respects (this has since been reopened) while allowing the National Mall to be used for an immigration rally (reported repeatedly). The closing of Florida Bay 11,000 square miles of ocean (reported by The Miami Herald). This is our government acting like a spoiled brat thug.

Right now we have one side with a lot of support willing to compromise with the other, who also has a lot of support, but one side basically saying it is our way or the highway. This has created a very dangerous situation. So dangerous in fact that NPR has reported that China has told the U.S. to get its financial house in order. China is looking to protect its 1.3 trillion dollar investment in this country, yet again we have one side basically saying either we get everything we want or we will let the whole world go down. I am not exaggerating- the whole world.

Now I am not saying that if no compromise is reached we will wake up on October 17th and the apocalypse will have begun. In fact we will have a few days where it will look like yet another big nothing. But if an agreement has not been made and the debt ceiling is not increased the United States will begin defaulting on many of its loans. If that happens the price of getting a loan for everyone in this country will jump big time. The value of the dollar will plummet, everything will cost a lot more. The government will not be able to give all of the benefits that it has promised everyone. That is where the real problems could begin.

Now remember if no compromise is reached the government will have lost its ability to borrow money and has already run out of cash. The government still has income. We are all still paying our taxes. They will just not have enough money to do all the the things they are used to or even all the things they have promised. If this happens the government will have to decide which debt it will pay. The government will have to decide whether to pay the things promised to its citizens or the interest payments to other countries. I wouldn't want to have to count on the generosity of a government in trouble. Below is a graph from NPR showing everyone to whom the government owes money. http://www.npr.org/blogs/money/2013/10/10/230944425/everyone-the-u-s-government-owes-money-to-in-one-graph



What would happen if this situation fully develops would just be a guess. I would just like to strongly encourage everyone to think and act in a way that prepares you a little more each day to take care of your family and yourself. I still think a compromise will be reached and this crisis will be delayed, but it is always better to be informed.

Keep It Rural

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By Gregg Carter

The Government Has Shut Down Now What?

I am sure most of you remember the hysteria that was going on before the sequester. Some were saying that it was going to cause massive economic problems. The sequester came and is still going on and guess what? Everything is still functioning. For most people the sequester hasn't changed anything.

For the most part the shutdown is going to be the same way. The mail is still going to run. Social Security checks will still be paid. The military is still on duty. Most average people will not notice a difference. Of the 3.3 million federal employees, only 800,000 have been placed on furlough. Now for those federal employees who are not salaried, this could hurt. Though most likely this pain will be temporary.

This is not the first time there has been a shutdown of the federal government. In 1995/96 the federal government was shut down for 21 days. How many of you remember that? I will be honest before I started researching this post, I did not remember. All of the people that were furloughed in 95/96 received every penny of their back pay. I repeat: THE WORKERS WHO WERE NOT ALLOWED TO GO TO WORK FOR 21 DAYS WERE PAID AS IF THEY HAD GONE TO WORK EVERY SINGLE DAY.

Okay, so now that we have that out of the way, how will the government shutdown affect you? If you are planning on going over seas and do not have a passport yet,you may have problems. You can expect long delays. If you are still expecting a tax return you will be waiting until after the shutdown is over. But you won't have to worry about an audit either. If you are wanting to get a class 3 firearms licence or a federal firearms licence you will see long processing delays. All national parks are closed and several smaller federal office buildings are closed. If you are about to retire you may see a delay in the start of your Social Security paperwork being processed. The one thing that will affect the largest number of people is the shut down of the WIC program.

WIC stands for Women  Infant Children. WIC is not food stamps, but it is very similar. WIC provides vouchers for food to pregnant  women and women with small children who earn below a certain dollar amount. The types of food that can be acquired through WIC is greatly restricted when compared to food stamps. The types of food that are commonly covered by WIC include: milk, formula, baby food, cheese, breakfast cereal, and things like that. This will have an impact on more people than all of the other things combined.

So you see for about 98% of people in the United States there will be no difference. So don't worry and....

Keep It Rural

By Gregg Carter

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The American Nightmare

While having a conversation at work ,the idea was floated that a guy who appears to never be happy at work or at home, was living the American Dream (sarcasm). Someone in the room said "It sounds more like a nightmare". That got me thinking. What was the original 1950's American dream? I will tell you. It was a nice but small home, a dependable car, the bills paid, and food in the fridge. All of this was done on one paycheck. How different is this from today? Well it is different in a lot of ways. We will go over several of the differences.

Our appetites for the latest and greatest has grown out of control.  It seems like the Apple company is releasing new iphones as often as I buy new pants.  We as a nation are no longer satisfied with a small nice house, we want what would have been considered a small mansion. If a car is more than a few years old or has started having mechanical problems, we want to trade it off. People are judged by the clothes they wear. We have been trying to "keep up with the Jones" only one problem. The Jones are up to their eyeballs in debt and if either of them lose their job they would quickly be bankrupt. These are just a few of the behaviors that have brought us here.

What can be done to turn the tide back in the direction of personal responsibility? Well I have said some of this before, but here goes. 1) Learn to repair many of your items yourself. If you have any mechanical skills at all most folks can take something apart and put it back together.  I had to stop in the middle of this article to fix the vacuum.  It was really stopped up and the belt was broken.  Good thing the replacement belts come in packs of two. 2) Grow some of your own food.  This can be done anywhere. Even in an apartment you can have a window box and grow some cooking herbs.  Herbs are fairly expensive and if you have never cooked with fresh herbs you do not know what you are missing.  3) Learn to compare unit cost. We as a culture think the bigger the container (the value packs) the better the deal.  I have found several things lately that this is not always the case.  For meat compare price per pound, for everything else learn to compare price per ounce.  This can save you a nice amount on grocery day. 4) Wear it out before replacing it. I have three different types of pants; dress, work, and around the house. There are several more but this is a good start.
While there is some good news out there it is not as encouraging as it should be. The national debt is at 16.24 trillion, that is $51,624 per every man, woman, and child or $141,680 per working person and going up by the minute. Personal debt is going down across the nation. People are realizing that they are just one or two paychecks out of the poorhouse. This trend must continue.

What are the challenges that we face? 1) National debt. If you pay attention at all you know that several countries around the world are in serious financial problems, Greece is the poster child of what can go wrong. 2) Personal debt. Personal debt is crippling each families abilities to deal with problems when they arise. If a family is making just enough money to pay the bills and feed the family, when something breaks the only option they have is to borrow money to fix the problem. 3) Taxes. Whether you realize it or not everyone's taxes will be going up January 2013.  Many people may not even realize the change until tax returns they get in 2014, but it will be a lot smaller return. 4) Unemployment. The official unemployment rate is 7.9 percent, but this does not include people who have stopped looking for employment because they have given up. Some reports say the real unemployment rate is somewhere between 15 - 20%. If you are working you may not think this is a big deal, but it is.  If you are not happy with your job, it is more difficult to find a better job.  According to recent reports there are 3.2 people who need a job for every job that is opened. We just had an opening in my department at work, we had 23 applicants that made it through the computerized screening for one position. A friend of mine said that there was a high paying  position open at his company and there were over 1400 applicants for one position.

Many Americans are critically close to the American dream becoming a nightmare.  Many more people are already living the American Nightmare.

Remember to Keep It Rural.