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HuffPo: Shutdown May Trigger Recession

Naturally we don’t normally post articles from Zsa Zsa’s AOL’s dream factory at the Huffington Post. But sometimes we just can’t resist highlighting the latest Democrat talking points, simply for their amusement factor:

Prolonged Government Shutdown Could Wither Confidence And Even Trigger Recession

William Alden

An extended federal government shutdown could devastate the U.S. economy by dealing a blow to Americans’ confidence, experts said Tuesday.

By the way, these "experts" are never named.

If lawmakers cannot reach agreement on a bill to fund the government by April 8, a broad array of federal programs will come to a halt. Although most shutdown plans remain classified, during the last major federal government shutdown in 1995, certain health services were shut down. Court cases were delayed. And federal workers were furloughed.

This time around, some fear low-income families will miss crucial government payments.

What health services were ever shut down? And, no, no "government payments" will be missed. Even the AP has admitted that.

But there is another consequence that could make all of those challenges far worse: The economy could slip back into recession.

Oh, our sides. But don’t you have to get out of a recession, before you can slip back into it?

Already, Americans face a host of economic woes. The unemployment rate remains high. Home prices are still falling, aggravating a widespread foreclosure crisis. Oil prices are rising, pushing transportation costs steadily higher and tearing precious resources from the economy.

In this context, a prolonged federal shutdown would drain Americans’ confidence in their government, hobbling spending, borrowing and investment — and pushing the economy toward recession, said Mark Zandi, chief economist of Moody’s Analytics

After about two weeks, that loss of confidence would "be fodder for a new recession," Zandi wrote in a report last month…

And to think, we used to believe that Moody’s was a reputable organization.

Republican lawmakers have warned that, if the government does not reign [sic] in federal spending, it could incite a crisis of confidence among investors in U.S. debt, which could make financing U.S. debt much more expensive.

Not to nitpick. But just think how the bosses at AOL feel, having spent $315 million dollars for a publication where the writers don’t even know the difference between ‘reign’ and ‘rein.’

But economists say public confidence could fast wither if Congress fails to pass a budget for the remainder of the fiscal year, wounding the economy from the inside…

"Even though the actual direct effects of a two-week government shutdown may not seem like such a big deal, it could trigger a mass panic or sell-off, or other types of market dynamics that could be really hard to predict or control," said Andrew Lo, professor of finance at the MIT Sloan School of Management.

We are laughing so hard, it is hard to breathe. Just imagine, with all that is going on in the world and here at home – a momentary shutdown of the government, which has happened numerous times over the past few decades – would trigger a recession.

He added that Americans might "start wondering whether or not government works at all."

Mr. Lo sounds like he doesn’t realize that this is a good thing.

On a short-term basis, the strain from a government shutdown would occur on a micro level, as struggling families would go without payments, and workers would be forced to stay home

We just can’t go on any further. Our eyes are blinded by the tears – of laughter.

This article was posted by Steve on Wednesday, March 30th, 2011. Comments are currently closed.

23 Responses to “HuffPo: Shutdown May Trigger Recession”

  1. GetBackJack says:

    Shouldn’t this Source be properly termed the HuffHo?

  2. tranquil.night says:

    Right.. because we’re currently in a recovery.

    Well, just like Libya, the Won has the table set so that he stands ready to profit in 2012 whether by getting the credit for any minor blip of success, or by blaming the Republicans for failure! The Obama Doctrine is satisfied! Winning!

  3. bill says:

    When you are a liberal and sit on your brain, then it must be a recovery …

    Can we engineer a shutdown for the next 1.5 years — save a lot of money and stupid country invasions.

  4. chuck koala says:

    Sure hope we’ll get to find out.

  5. Right of the People says:

    The Puffington Host acts like a shutdown would be a bad thing.

    As long as the military and agencies like the Border Patrol aren’t shut down, I don’t think anybody would care or even notice. Just think of the savings!

    • Rusty Shackleford says:

      But wait, there’s more!

      Send no money now!

      Operators are standing…..bye!

    • TerryAnne says:

      Actually…it is the military this time. I’m a reservist and we’ve already been told several times we won’t be funded, but my active duty friends are now telling me they’ve been told the same.

      W00t slavery!

  6. Mae says:

    It’s one of those downright boo-hoo moments, isn’t it? Now if only we could cut off payment of the Congressional paychecks–elected, appointed, staff, plus the Big I Don’t Have To Show No Stinkin’ Birth Certificate himself. The squealing alone would be worth it.

  7. Mr Michael says:

    The HuffPo DOES realize that this is the budget that Nancy Pelosi was supposed to pass… right? The one that she never DID pass? The one that was supposed to keep the Gov’t from shutting down at the beginning of the fiscal year?

    Maybe they could mention that the only reason that the Gov’t isn’t already shut down is because the Republicans have proposed budget after budget, CR after CR trying to keep it going… and who exactly hasn’t done their jobs YET… Harry… :sigh: Huff Po and AOL. Good match.

  8. Mithrandir says:

    The Bi-Polar Media

    ~It’s either ROCK STAR, outrageously naive/optimistic–wild-eyed-cheerleading treatment of Democrats.


    ~It’s WOE IS ME the world is terrible and fall apart if Republicans get their way, and Democrats are made to look silly.

    More proof that the Democrats are a CULT in which all efforts are to support and dignify their dear leaders.

  9. Chase says:

    The crock of furloughs, when my contemporaries “suffered one,” is that once they are back at work, they all get back-pay to cover the time anyway. So, it is just free days off…..or that is the way it was for the non-essential (non-union) employees I knew in the Dept. of Defense.

    No savings there.

  10. P. Aaron says:

    The article forgot the: Women & minorities hardest hit part.

  11. SECREV says:

    “HuffPo: Shutdown May Trigger Recession”

    It also may cause melt-down of Japanese reactors. On the bright side, though, it will put Obama and Fourty Thieves out of business for a short while. You know how much those goons are costing the Republic every single day they are not golfing?

    • proreason says:

      SECREV should be a regular

    • tranquil.night says:

      It is a great point.

      Will ObamaCare continue to be funded and implemented in the event of a ‘shutdown’?

      How about that remaining stimulus cash? The alphabet soup regulatory bureaucracies?

      The executive gets discretion over what’s “essential” in a shutdown. And we know that even those who won’t be working are going to get paid retro-actively, like Clinton arranged.

      And the Republicans are afraid they’re going to get the blame for people missing salaries or benefits? It’ll only happen if they let it happen, and they’ve already let it happen.

  12. Kaffeesatz says:

    It is interesting to note that the article does make one thing very clear – we are living WAY above our means. 43 cents on the dollar of deficit spending!!

    Of course, this creates a catch-22 scenario. Spending is out of control and causing a recession, but you can’t cut spending without causing a recession.

    I say go with Plan B. Cut spending and risk the recession. At least we will have a debt burden in the future as we ‘recover’.



  13. Liberals Demise says:

    I don’t see where the “crisis” is and if there is no “crisis” they are more than willing to create one. A shut down is a good thing in my book. I say send everyone on the Hill home to hear the anger first hand from the voters.
    It’s been almost 3 months since the new Congress was seated and all I see is posturing and lip service. Then we have the (D)emocraps getting power words to use at every opportunity in front of the cameras. Talk about weasels in skin suits……
    Recession? Shiite……..we’re there!

  14. bobdog says:

    How many poor little babies and cuddly puppies will die if they do? What’s this morning’s estimate from the White House? 7, 8 hundred thousand?

    • JohnMG says:

      On the other hand, think of all the jobs ‘saved or created’ at the abortion clinics and veterinary offices. That should make for some great poll numbers when the next un-employment reports are published.

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