Without a budget agreement for the new fiscal year, the U.S. government now has no choice but to shut down it’s non-essential services.
National monuments and parks will be closed, and a bunch of Pentagon employees won’t be coming in for work today.
All in all, an estimated 800,000 more people will wake up today without a job.
Is This A Disaster?
In the traditional sense, no.
Essential services like social security and the military will continue operating and are not affected.
For the most part, the major concern regarding this partial shutdown has been limited to a lower GDP for the United States.
This said, 800,000 unemployed people is not a small matter.
How Was This Allowed To Happen?!
This was actually not a surprise at all. At least, not to the people who have been watching.
The U.S. government has been in debt for a long time, and this is just one of many symptoms of an underlying issue: they are continuing to spend more than they can afford.
Another symptom we’ll soon be paying attention to, is the U.S. debt ceiling issue on October 17.
How Do I Bankrupt Thee? Let Me Count The Ways
Unlike this partial government shutdown, the debt ceiling debate will have massive implications for the United States, and financial markets around the world.
In the meantime, the stock market remains elevated, as though things are looking rosier than ever.
The foundation of the skyscraper is getting weaker by the day, and yet more levels are being added on top.
How high do you think this can keep going?
The Iron Rice Bowl
The Chinese have a saying, that when one works in a stable career, he has an Iron Rice Bowl.
This refers to a bowl of rice that cannot be broken, and he will never have to worry about going hungry.
And if there’s one career path that guarantees an Iron Rice Bowl, it would be working for the government… at least, that’s what people thought.
When The Sh*t Hits The Fan
I’ve said this many times before: When the sh*t hits the fan, whose interest do you think the government is going to protect?
Yours, or theirs?
We’ve already seen bank accounts being frozen and confiscated in Cyprus.
But of course, they don’t call it a confiscation… they call it a “tax”.
And while I don’t see this happening in the United States, you can be sure there are many other ways for a bankrupt government to get their hands on your money.
Is This Moral?
To be blunt, morality has nothing to do with this.
The fact is that in desperate times, the government can, and will likely use all kinds of justifications to legitimize their actions.
This has happened many times throughout history, if you just bother to take a look.
And if you’ve ever known people who were heavily in debt, you’d know how desperate they can get.
After all, desperate times calls for desperate measures.
The question is: are you going to be on the giving or receiving end of those desperate measures?
Who Are You Relying On For Income?
For the 800,000 federal employees who suddenly lost their jobs, they found out the hard way, what it’s like to rely on someone else for income.
The fact is, the Iron Rice Bowls of the 90’s are long gone. Even high level corporate executives are not spared from routine company “restructurings”.
Governments and companies alike are struggling to adapt to our rapidly changing world, and I believe we have not seen the worst of things to come.
The people who see the writing on the wall recognize that these are are symptoms of a worsening problem.
And the smart ones are getting off their butts and taking actions to protect their futures.
The best part is, even if somehow, everything turned rosy tomorrow and all government debts are forgiven, these people are still not worse off having an additional stream of income.
When the sh*t hits the fan, there will be two types of people: those who stare at it helplessly, and those who have prepared themselves to be financially independent.