Good morning, everyone. It's T minus six and counting to the government shutdown. Included in today's reads are some stories with information and statistics on what it all means.
Showdown or shutdown?
The Institute for Policy Innovation put together some fun facts about federal government shutdowns. The key numbers are: 17 (shutdowns in U.S. history); 22 (days, the longest); and 8 (the most under a single president, Ronald Reagan). The last shutdown (1995-1996) is such a distant memory that most folks think it's a rare event. In reality, "government shutdowns -- or 'funding gaps,' as the government more accurately refers to them because it continues to fund 'essential services' -- used to be a regular event, even when Democrats controlled both houses of Congress and the White House," the IPI writes. Imagine that.
What a government shutdown means for you
The Committee for a Responsible Federal Budget tells us just that. Social Security and Medicare checks will go out, but don't try to sign up for these programs during a government shutdown. Nor is it a good time to visit the National Parks or apply for a passport. Essential services -- those related to public safety -- will be maintained. Some federal workers will be furloughed. Before you start imagining that a shutdown is a good way to save money, the last one cost $1.4 billion, the CRFB reports.
Bernanke is hard to beat
Blogger Joshua Brown, a.k.a. the reformed broker, attended the Bloomberg Markets 50 Summit yesterday and took notes so you don't have to. There were some good laughs in response to comments from former Fed governor Larry Meyer, who was interviewed by Bloomberg's Michael McKee. Meyer explained how the Fed worked under Alan Greenspan: Greenspan spoke first, and everyone else around the table nodded in agreement. Not so under Bernanke, who still gets his way even though he speaks last at the meetings. "There'll never be another Fed Chairman like Ben Bernanke," Meyer said.
Who knew what when?
Regulators are looking into possible trading irregularities last week in connection with the Fed's surprise "no-taper" announcement. It seems that within one millisecond (1/1000 of a second) of the Fed's announcement, there was a flurry of trading activity in financial instruments related to gold. "The quick response is unusual because information takes seven milliseconds to travel to Chicago from Washington, where the Fed statement is released," write Bloomberg's Josh Zumbrun and Silla Brush. I didn't know there were timers that could capture milliseconds.
The U.S. consumes more as a percentage of gross domestic product than any other developed country except Greece, according to a study by the Tax Foundation. Even worse, it invests less than any developed economy except the U.K. Investment drives growth, because it increases a nation's productive capacity. Maybe all that Keynesian stimulus -- putting money in the pockets of those who will spend it -- isn't such a good idea after all.
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