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York: 83% Of The Government Is Not Shutdown

From the Washington Examiner:

Where’s sense of crisis in a 17% government shutdown?

By BYRON YORK | OCTOBER 5, 2013

… One way to measure [a government shutdown] is in how much money the government spends. In a conversation Thursday, a Republican member of Congress mentioned that the military pay act, passed by Congress and signed by President Obama at the beginning of the shutdown, is actually a huge percentage of the government’s discretionary spending in any given year. And that is still flowing.

The ‘Military Pay Act’ basically exempted the military from any government shutdown.

So if you took that money, and added it to all the entitlement spending that is unaffected by a shutdown, plus all the areas of spending that are exempted from a shutdown, and added it all together, how much of the federal government’s total spending is still underway even though the government is technically shut down?

I asked a Republican source on the Senate Budget Committee for an estimate. This was the answer: "Based on estimates drawn from CBO and OMB data, 83 percent of government operations will continue.

This figure assumes that the government pays amounts due on appropriations obligated before the shutdown ($512 billion), spends $225 billion on exempted military and civilian personnel, pays entitlement benefits for those found eligible before the shutdown (about $2 trillion), and pays interest costs when due ($237 billion). This is about 83 percent of projected 2014 spending of $3.6 trillion."

So the government shutdown, at least as measured by money spent, is really a 17 percent government shutdown.

Perhaps that is why the effects of the shutdown, beyond some of the most visible problems, like at the monuments and memorials on the Washington Mall, don’t seem to have the expected intensity…

Which is why it was so important to Obama to shut down those monuments and memorials and the national parks. Most of which have never been shut down in any of the previous 17 shutdowns.

Not to diminish Mr. York’s good research here, but as we have previously noted, even the AP admitted back in February 2011 that only one quarter of federal employees would stay home in a government shutdown. And they also admitted that the vast majority of the government would continue to function as usual.

But for some reason this information has never been reported in most of the mainstream media’s reports on the shutdown. Perhaps they think it would undercut their fearmongering and Republican bashing.

This article was posted by Steve Gilbert on Monday, October 7th, 2013. Comments are currently closed.

7 Responses to “York: 83% Of The Government Is Not Shutdown”

  1. Petronius

    The largest items in the Federal budget are:

    1. Medicare/Medicaid $858 billion
    2. Social Security $810 billion
    3. defense $609 billion
    4. income security $349 billion
    5. interest on the debt $259 billion
    6. civil service pensions $228 billion

    http://www.usdebtclock.org/

    Except for defense, most of the above is considered “mandatory” spending. Defense and border patrol spending has also been authorized by the recent vote of Congress.

    Assuming that Federal spending will top off at about $3.6 trillion this year, that leaves just $487 billion for everything else (discretionary spending), or about 13.5 percent –– which is the part of government that is shut-down.

    By the way, the key item to watch is #5 interest on the public debt. The US currently pays 2.6 percent interest on 10 year Treasuries. In 2001 it was paying over 6 percent. If rates returned to historic levels, it would flip the Federal budget upside down. Interest expense would consume half of tax revenues ($2.7 trillion).

    We’d be paying $1.2 trillion in interest expense annually on the national debt. That amount of increase would probably destroy the government’s ability to borrow, and the interest payments would consume all of what is currently being spent for discretionary spending (including defense).

    Of course that projection assumes that the big ticket entitlements like Medicare, Medicaid, and Social Security are “mandatory” spending (like mandatory payments on the debt) and continue unreformed. Given that assumption, we can see that the US is already locked into a default scenario. We are locked-in even without an interest rate spike.

    That projection also ignores Obama-care, which is expected to add about $3 trillion more debt in the next decade.

    • mr_bill

      Nicely summarized, Petronius. This is a great explanation of why the government is working so hard to keep interest rates low. I’ll tell you one thing, I’m not holding a lot of cash right now, you can’t eat dollar bills.

    • Petronius

      Visitors to the British Museum gaze in wonder at the fabulous Mildenhall Treasure and Hoxne Hoard. Around 410 AD, when the last Roman legion withdrew from Britain, the barbarians moved in. Across the Empire frightened Romans buried their wealth in the form of gold and silver coin and plate, grabbed their bug-out bags, and ran away, expecting to return someday to recover their fortunes. But the barbarians came and stayed. The Dark Ages lasted some six centuries. And today those treasure hoards are still being dug up across Britain, Europe, North Africa, and the MidEast.

      People need to realize that you can’t spend your way to prosperity. You can only save your way to prosperity. Spending is counterproductive per se.

      The US needs to stop all of its cradle-to-grave welfare spending and return immediately to economic reality.

      Austerity is an emotionally laden word that has become tainted by socialists through years of political abuse. Austerity, they say, is something that only works for Germans.

      But austerity simply means living within your means. It means pay-as-you-go. It means a return to economic reality. In the real world there is no alternative to austerity. As Margaret Thatcher once said, socialism works fine until you run out of other people’s money. And we have just about run out.

      Some Republicans say that economic growth is the answer. That with economic growth government will experience an increase in tax revenues. But hand in hand with economic growth will come increases in the cost of borrowing (interest rates).

      A return to normal interest rates would mean that tax revenues––even under the rosiest growth scenario––become insufficient to cover debt-service costs, so that default on the national debt becomes inevitable.

      $20 trillion in debt cannot be reduced through increased taxation for the simple reason that there aren’t enough rich people. And there aren’t nearly enough middle class people either. And there isn’t enough gold in Fort Knox. (Note: Estimates vary, but all the US gold in Fort Knox and the New York Fed would be worth only about $200 billion––or about 1 percent of the public debt. Moreover, to even suggest selling US gold would shock world markets and precipitate a debt crisis.) The US debt is growing so gigantic that the idea of paying it down is out of the question.

      Debt can be cancelled––i.e., eliminated or reduced by default. But every debt is someone else’s asset, and a default would inflict great pain on creditors, including seniors dependent on Social Security, Medicare, bonds, mutual funds, annuities, etc., not to mention our Chinese masters. Default would trigger a global debt crisis and meltdown.

      The most politically palatable solution––and the most likely outcome––will be hyperinflation. But here we are entering uncharted waters.

      Hyperinflation is experimental and problematic and all the results cannot be predicted. We have the examples of Weimar Germany, Zimbabwe, Argentina, and Mexico before us. We should probably expect some sort of banana republic scenario to unfold: destruction of the currency, the ruin of paper assets including securities such as stocks, bonds, and mortgages, economic collapse, widespread social upheaval, a breakdown of law and order, political revolution, military coups, and an end to freedom and democracy, to be replaced by an authoritarian government or dictatorship.

      My best guess is that we have ten reasonably good years, maybe fifteen at the outside, to prepare for the coming Dark Age. If you haven’t already started your planning, there is still time. Start saving like your life depended on it (it probably does). Invest in physical gold and silver and strong foreign currencies. Establish your retreat, and fund and execute your get-out-of-Dodge plan.

    • Petronius,

      All are excellent suggestions, but there’s a few issues I would say aren’t going to allow for your solutions.

      First, there’s no way we’ve got 10-15 years. 5 …tops!

      Second, world government is quickly on it’s way. The result will be one currency, no foreign currency will survive, and that will be digital money. No paper or coins, probably a mark on your forehead or right hand….

      Third, precious metals will be illegal for the public to own, except some jewelry, as it was under socialist FDR. The rich and governments will be the only ones allowed that privilage.

      Fourth, the “get out of dodge plan” is out because world government means the laws are the same everywhere and they aren’t going to allow we minions to travel anyway.

      The Anti-Christ is among us people. World domination is his goal and Christians and Jews are his enemies. Among his greatest enemies is the USA, founded by the rule of law based on the laws of GOD. AC hates that! Thus his constant attackon her. There is only one way out. JESUS!

  2. mr_bill

    GBJ, I have some, but I’m fond of saying one can never have too much beef.

    On a more serious note, I don’t think we’re in the debt spiral just yet. We’re very close, but refusing to increase the debt limit is the smart move here. I might be inclined to agree with a very small increase equivalent to a couple months worth of debt accumulation at current rates, but this is the lats and it only buys time to pass a balanced budget. The resolution allowing the increase would be accompanied with a criminal statute requiring passage of a balanced budget by the end of this year. Failure to do so would be an impeachable offense for Congressmen as well as the president. The debt limit would also automatically decrease every day for each increment of the public debt paid off. There would be a floor of $1 trillion, below which the debt limit would not decrease. Future increases (or changes to this statute) would require a vote of 75% of both houses, combined with the signature of the president. The time for drastic measures is at hand, beyond this, Petronius’ scenario will become reality. I’m pretty sure nobody wants that. If this administration can work as hard at balancing the budget as it does on spending money once the borrowing limit has been reached, there may just be some hope left.

    Force Congress to balance the budget, cut up the credit card, and eliminate their ability to run such huge deficits in the future.


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