Topic Tuesday #67 2013/10/29 - "When The Boys Came Home"

Topic Tuesday #67 2013/10/29 - "When The Boys Came Home"

Beginning after VJ-Day in 1945, millions of soldiers were out of a job, Veterans from the largest conflict the world had ever seen. What the hell did they do next?
Why do I ask?
Glad you asked, and I will answer with another question. What will happen when the U.S.A. has to reduce the defense budget by double digit percentages, in 2014 with the next round of sequestration cuts? A lot of men and women will be looking for something to do. Something to feed their families.
What will they do? I thought it appropriate to look at history for an indicator of what we are about to repeat.
Brief review of WWII:

Obviously there was much more that happened, but those are some highlights. Now with all that, the troops, the men, the soldiers, the veterans and survivors came home.
Thanks to the 1944  Servicemen's readjustment Act, returning heroes could get low-cost mortgages, low-interest loans to start a business, cash payments of tuition and living expenses to attend college, high school or vocational education, as well as one year of unemployment compensation. 8.8 million veterans had taken advantage of the program before it ended in 1956. Thanks to the forethought of the FDR administration and veterans affairs lobbyists, the G.I. Bill set the groundwork for a successful reintegration of disciplined and skilled Americans. Education (51% of returning WWII Vets took advantage of the tuition program) allowed them to get jobs, or if there wasn't one to be had, they could get low interest small business loans. 
We respectfully took care of those that had served. What will we do when the Cold War ends? 
It ended? You say... 
When? I ask. 1991 says the web... 
Then Why do we still spend so much on the military?  When did we stop? 
We never did. We have a juggernaut war machine in place, that just keeps eating our resources. 
As we continue to talk about exit strategies... Has anyone heard of any reintegration plans for those that will be exiting the services? I have not. I also have not seen us exit any conflict.
The economists are looking at the bottom line. They know as well as you or I, that the war machine needs a diet. We spend as much as our allies combined on "defense". Why? Don't answer, it doesn't matter.
What matters is that it needs to stop, and we need an exit strategy and a reintegration plan. We don't need more fear.
So... As the next round of sequester cuts steadily marches towards us, and the government pulls the belt in another notch, what will those that have lost their jobs do?
Will they be able to get a small business loan? Will they be able to get an affordable education if they go back to school? Are there enough vocational schools out there to fill the need? Are there enough homeless shelters to house what we have now, much less an influx of displaced humans?
No. For the most part the answer to all these questions is no.
Why?
What can we do?
I'm going to write a letter to my representatives to find out what the plan is. To see if they have thought this out. I'll let you know, please do the same.


Topic Tuesday #63 2013/10/01 - "Government Zombies: Shutdown Victims"

Topic Tuesday #63 2013/10/01 - "Government Zombies: Shutdown Aftermath"

The men and women on capitol hill have had a tiff, and can't agree on a budget. The consequence is not just a sequester, but a full stop. A shutdown of government for the first time in 17 years.
I'm not going to get into the politics of WHY, but what there is to deal with now.
There are a few websites that have put things very well, and I must refer you to them, as I am going to borrow heavily from them.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/30/absolutely-everything-you-need-to-know-about-how-the-government-shutdown-will-work/?tid=pm_business_pop
http://www.theverge.com/2013/9/30/4789162/shutdown-us-2013-nasa-epa-hhs

So what has happened? 


  • "Short answer: There are wide swaths of the federal government that need to be funded each year in order to operate. If Congress can't agree on how to fund them, they have to close down. And, right now, Congress can't agree on how to fund them." - Wonkblog

  • No budget was passed. The House adjourned at 12:20 AM and will reconvene at 9:30 AM.
  • Monday a resolution was signed to allow our service men and women to continue to get a paycheck http://www.politico.com/story/2013/09/house-gop-moves-to-protect-military-pay-in-a-shutdown-97508.html.
  • As of midnight the White House Office of Management and Budget issued this memo, http://www.washingtonpost.com/blogs/wonkblog/?p=63520&preview=true shutting down government agencies and sending non-exempt (non essential) personnel home after a half day of getting things wrapped up to the best of their ability. The essential workers continue working, without pay. Civilian essential employees may not get a paycheck during the shutdown. They will, however, receive retroactive pay if and when Congress decides to fund the government again. Non-Exempt, may not get retroactive pay, that is up to the House.

    • Which parts of government stay open?

    • There are a whole bunch of key government functions that carry on during a shutdown, including anything related to national security, public safety, or programs written into permanent law (like Social Security). Here's a partial list:
    • - Any employee or office that "provides for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property." That means the U.S. military will keep operating, for one. So will embassies abroad.
    • - Any employee who conducts "essential activities to the extent that they protect life and property." So, for example: Air traffic control stays open. So does all emergency medical care, food-safety inspections, border patrol, federal prisons, most law enforcement, emergency and disaster assistance, overseeing the banking system, operating the power grid, and guarding federal property.
    • - Agencies have to keep sending out benefits and operating programs that are written into permanent law or get multi-year funding. That means sending out Social Security checks and providing certain types of veterans' benefits.
    • - All agencies with independent sources of funding remain open, including the U.S. Postal Service and the Federal Reserve.
    • - Members of Congress can also stick around, since their pay is written into permanent law. However, many congressional staffers may not get paid without specific appropriations. Many White House employees may also have to go without pay.

    So which parts of government actually shut down?

    • "Everything else, basically. It's a fairly long list, and you can check out in detail which activities the agencies are planning to halt in these contingency plans posted by each agency. Here are a few select examples:
    • Health: The National Institutes of Health will stop accepting new patients for clinical research and stop answering hotline calls about medial questions. The Centers for Disease Control will have a "significantly reduced capacity to respond to outbreak investigations."
    • Housing: The Department of Housing and Urban Development will not be able to provide local housing authorities with additional money for housing vouchers. The nation's 3,300 public housing authorities will not receive payments, although most of these agencies, however, have funds to provide rental assistance through October.
    • Immigration: The Department of Homeland Security will no longer operate its E-Verify program, which means that businesses will not be able to check on the legal immigration status of prospective employees during the shutdown.
    • Law enforcement: Although agencies like the FBI and the Drug Enforcement Agency will continue their operations, the Justice Department will suspend many civil cases.
    • Parks and museums: The National Park Service will close more than 350 national parks and museums, including Yosemite National Park in California, Alcatraz in San Francisco, and the Statue of Liberty in New York. Last time this happened in 1995-1996, some 7 million visitors were turned away. (One big exception was the south rim of the Grand Canyon, which stayed open only because Arizona agreed to pick up the tab.)
    • Regulatory agencies: The Environmental Protection Agency will close down almost entirely during a shutdown, save for operations around Superfund cites. The Commodity Futures Trading Commission will also shut down. A few financial regulators, however, like the Securities and Exchange Commission, will remain open.
    • (Small parts of) Social Security: The Social Security Administration will keep on enough employees to make sure the checks keep going out. But the agency won't have enough staff to do things like help recipients replace their benefit cards or schedule new hearings for disability cases.
    • Visas and passports: The State Department says it will keep most consulates and embassies open this time around, although some passport and visa processing could be interrupted. (For instance, "if a passport agency is located in a government building affected by a lapse in appropriations, the facility may become unsupported.")
    • During the previous shutdown in 1995-1996, around 20,000 to 30,000 applications from foreigners for visas went unprocessed each day. It's unclear how many might be affected this time around.*
    • Veterans: Some key benefits will continue and the VA hospitals will remained open. But many services will be disrupted. The Veterans Benefits Administration will be unable to process education and rehabilitation benefits. The Board of Veterans' Appeals will be unable to hold hearings.
    • Rep. Rush Holt (D-N.J.) has a list of other possible effects of a shutdown. Funds to help states administer unemployment benefits could get disrupted, IRS tax-refund processing for certain returns would be suspended, new home-loan guarantees could cease, farm loans and payments would stop, and Small Business Administration approval of business loan guarantees and direct loans would likely cease.
    • The National Aeronautics and Space Administration will see over 90 percent of its civilian workforce be immediately furloughed, 17,701 out of 18,250 total employees, according to the shutdown plan the agency filed last week. As President Obama put it in an emergency address last night, "NASA will shut down almost entirely, but Mission Control will remain open to support the astronauts serving on the Space Station."
    AND SO MUCH MORE....
    Here's the thing that will stick in the craw of many. Obamacare lives. 
    "As Sarah Kliff has explained, the key parts of Obamacare rely on mandatory spending that isn't affected by a shutdown. "That includes the new online marketplaces, known as exchanges, where uninsured people will be able to shop for coverage. The Medicaid expansion is funded with mandatory funding, as are the billions in federal tax credits to help with purchasing coverage."
    That means uninsured Americans will be able to start shopping for plans when the exchanges launch Oct. 1, although there are likely to be some glitches."
    This is not the Debt Ceiling Crisis, that happens later, between 10/18/13 and 11/05/13
    The longest shutdown was 21 days. Hopefully the folks in the clean pressed suits can get their heads out of... and get them together to make good choices. 
    Congress needs to pass a bill (or bills) to fund the government, and the White House has to sign them. They can do this at any time. Or they can sit at home and keep the government closed. Nothing requires them to do anything. It depends what sort of political pressure they're facing.

    Topic Tuesday #62 2013/09/24 - "Sequester or Default? Wait, what does that mean?"

    Topic Tuesday #62 2013/09/24 - "Sequester or Default because of the "Debt Ceiling"? Wait, what does that mean?"

    What have we gotten ourselves into?

    What is a "Sequester"? What is a Debt Ceiling and why does it need to be raised or we will default?

    http://drawnopinions.blogspot.com/2011/07/debt-crisis.htmlse·ques·ter  (səˈkwestər) verb
    1. isolate or hide away (someone or something).
      "Tiberius was sequestered on an island"
    2. take legal possession of (assets) until a debt has been paid or other claims have been met.
      "the power of courts to sequester the assets of unions"
      • take forcible possession of (something); confiscate.
        "rebel property was sequestered and a military government installed"
      • legally place (the property of a bankrupt) in the hands of a trustee for division among the creditors.
        "a trustee in a sequestered estate"
    So as you can see from the dictionary definition, it involves withholding assets (or money) until such time as a criteria has been met for it to be released. The criteria here was spelled out in legalese in the Budget Control Act of 2011. In brief, it raised the debt ceiling and sought to apply pressure on Congress to come up with a longer term plan for deficit reduction.
    From a Huffpo article: The $1.2 trillion in budget cuts would be spread over nine years and are equally divided between domestic and defense-related spending. During the remainder of the 2013 fiscal year, $85 billion worth of cuts are set to go into effect. The budget cuts would end in 2021.  [Summarized from their article] The Sequester was to answer a Republican demand after raising the Debt Ceiling (more on that in a moment). The Congress Joint Select Committee on Deficit Reduction ultimately proved unable to reach an agreement. This ended  up forcing the sequester to go though and shut down government (because Congress couldn't agree to a 1.2 trillion reduced budget the allotted time).
    The sequester stipulated certain areas of government spending will see no cuts. No money will be drawn from spending on wars and military personnel. Funding allocated for Medicaid, Social Security, Pell grants, veterans' benefits and some low-income programs will not be affected, either.
    The POTUS says this about the "Sequester":
    “The whole design of these arbitrary cuts was to make them so unattractive and unappealing that Democrats and Republicans would actually get together and find a good compromise of sensible cuts as well as closing tax loopholes and so forth. And so this was all designed to say we can't do these bad cuts; let’s do something smarter. That was the whole point of this so-called sequestration." —President Obama

    That was the Sequester... what about the debt ceiling? 

    In a line; "A legislative restriction on the amount of national debt that can be issued by the Treasury."
    Here's where it gets complicated.
    Just because there is a limit of the debt that can be issued (in the form of bonds typically) it doesn't actually stop spending, it just stops the treasury from paying on the debt. It halts the liquidity that goes out in interest payments on the debt to the other nations of the world who have purchased the debt. There are consequences to not paying your debts. You lose points on your credit rating (the measure of being a safe investment that judges how much interest you are charged on the credit extended to you. If you are a risk, you pay more. Like buying a car or house.). The US Credit rating was downgraded in 2011, causing drops in the stock market and raising interest rates, the last time we had this mess. We had to raise the debt ceiling to avoid defaulting. Currently the "Debt Ceiling" is $16.699 trillion and will be exhausted and need to be raised again in October 2013.

    What happens if we default because we can't pay on the debt by borrowing more?

    In 2011, House Republicans threatened to shut down the government and breach the debt ceiling unless the Obama administration made substantial concessions. The two sides ultimately came to an agreement. There was no shutdown. There was no default. But we did have our rating reduced making borrowing money more expensive.
    From "The Debt Limit: History and Recent Increases"
    "The Government Accountability Office has also concluded that delays in debt limit increases could lead to “serious negative consequences for the Treasury market and increase borrowing costs.” A delay in interest payments on Treasury securities would trigger a default and risk serious negative repercussions for economies and financial markets around the world. Default might be avoided in such situations by delaying other types of federal payments and transfers. A government that delays payment of an obligation, in effect, borrows from vendors, contractors, beneficiaries, state and local governments, or employees who are not paid on time. In some cases, delaying payments incurs interest penalties under some statutes such as the Prompt Payment Act, which directs the government to pay interest penalties to contractors if it does not pay them by the required payment date, and the Internal Revenue Code, which requires the government to pay interest penalties if tax refunds are delayed beyond a certain date."

    Drawn conclusions?

    Now if I can expound upon the former: The stability of other countries finances are interwoven with the United States due to their reliance on held American and America paying dutifully on the interest. Should America stop paying foreign held debt, then those reliant nations will have hardships paying their own debts. The amount of impact will vary and is largely unpredictable, but if we take it to the next logical progression, we can expect drops in global markets and economic downturns that could spiral to collapse because America missed some payments - or stops paying entirely and writes it all off, bankrupting other countries. This could lead to conflict; war is a fantastic economic stimulus.
    That's the geopolitical landscape, locally here at home, we have another fine mess.
    And that will be for next week.


    Thanks to http://drawnopinions.blogspot.com/2011/07/debt-crisis.html for the image.