Government Shutdown: Why It Doesn’t Matter

The Government has shut down.

Big scary news.  How can life as we know it continue?!

For the vast majority of Americans, life will go on as usual.  Your TV still works (even Big Bird on PBS!), your computer and internet still work.  You can cook dinner and savor the flavors as always.  Your evening stroll around the neighborhood is still possible.  Your car will start each morning as you drive on the roads that facilitate your daily commute.  You can drink beer in a bar or on your back porch.  Football will be played and spectated on Thursdays, Saturdays, and Sundays (have a beer while watching that, too).  Rock bands play on; we continue to play on Rock Band.

The mailman still waves “hi” as he slips unwanted junk mail into your mailbox.  The wind blows, the rain rains, the sun comes out and shines.  Sometimes you see a rainbow.

Autumn is in various stages of arrival across the US, and nothing has substantially changed compared to the pre-Shutdown days when the leaves were a little more green and still clung to the trees in some places.

October 1: The Shutdown happened.  Life Continued.

In the days leading up to October 1, 2013, I recall seeing headlines and reading blurbs about “OMGz the government is going to potentially shut down and how can we ever survive?!?!?”.  Since I don’t work any more, I’m not engaged in idle water cooler talk about current events (like The Shutdown).  Conversations typically turn to more meaningful topics.

I got so busy living life and relaxing, that I forgot to check whether our government shut down as scheduled at 12:01 a.m. on October 1st.  At some point mid-morning or maybe afternoon on October 1st, I suddenly remembered that the Government Shutdown was potentially going to happen, and I better tune in to see to whether I should prepare for mass riots and tear gas in the street, long bread lines, and a general Mad Max-esque survivalist landscape.  After all, I had to walk up the street to my children’s school at 2:45 p.m., and the last thing I needed was unnecessary delay if the world was, in fact, coming to an end.  So I buckled and succumbed to the urge to know.

Did the government actually shut down?  How can 535 of the smartest, wisest, most altruistic people in America, with the best interests of their constituents in mind, not reach an agreement that would allow the government to continue operating?  It was really unfathomable that no resolution could be reached, and the government would shut down.  But it did.  It shouldn’t be too surprising.  Shutdowns happen every five years on average (six other times in the last 30 years).

After finding out the disappointing news that we, the people, have apparently elected bickering five year olds who haven’t quite been socialized to the point of learning how to play nicely with each other, I realized it was time to head out on my afternoon walk to school to pick up my moderately well socialized children who occasionally play nice with each other.  The walk was uneventful, other than watching the cars go by, swirling leaves into the air, and seeing squirrels packing away acorns to snack on later during their long winter dormancy.

The squirrels are lucky, because they don’t live in a world of concern about government shutdowns and the impacts it will have on our daily lives.  They just pack the nuts away, hope for the best, and cozy up in their nests to wait the winter out.

We can learn something from the squirrel.  Emulate him.  Pack those acorns away, and you can sleep soundly without worrying what our crazy government does next, since you have your figurative stash of acorns in your den to aid in your survival during the difficult winter months.  Spring eventually arrives, as the end of the Government Shutdown must also.

If squirrels were like many of us humans, they would have a tiny smartphone sized TV blaring CNN (or Fox News if you like) 24-7 in their cozy little dens all winter.  Constantly watching and waiting to see what will happen next.  Which bishop or rook will make an attempt to take the knight or queen, only to have a few of their pawns sacrificed in the action?  Pawns are dispensable, right?

The Low Information Diet

I didn’t realize it that morning of October 1st or in the months preceding, but I have been slowly weaning myself off sensationalist media coverage and putting myself on a Low Information Diet.  The esteemed Mr. Money Mustache recently opined on the virtues of the Low Information Diet.  I’m with him.  Tune out, and get back to living life.  Most of the news is what I call infotainment.  It presents us with scary things that interest us.  Events that could theoretically happen to us, but are unlikely given the tiny percentage likelihood.

In his Low Information Diet blog post, Mr. Money Mustache commented:

The news also completely fucks up the layperson’s perception of risk. The very fact that bad events are rare these days, makes them newsworthy. A bicyclist hit by a car. A school shooting or an abduction. A terrorist attack. These things are so uncommon, it is best to ignore the possibility of them when planning your own life. But with a sample size of over 300 million people in the US and 7 billion worldwide, unusual tragedies happen daily, and they end up on the news nightly.

Out of 300 million people, about 299.99 million live uneventful lives on any given day.  For good reason, the media does not interview the 299.99 million people who woke up, peed in the toilet, went to school or work, came home, watched some TV, passed out on the couch, and are likely to repeat the same routine every day.

This type of coverage would be so boring that there would be about 299.99 million fewer TV viewers every day.  Advertisers would cease paying TV stations to sandwich a few minutes of “news” in between five minutes slugs of commercials advertising new cars, awesome fast food restaurants, and the best deals on life insurance.

TV executives are really smart, the mental prowess of some rivaling that of our most esteemed members of Congress.  They know sensationalist news gets eyeballs on the screen.  Advertisers, like human organ traffickers, are willing to pay top dollar for eyeballs.

The TV executives know that “Government Shutdown” sounds scary and intriguing and it is novel to most of us.  Coverage of disasters and catastrophes always results in high viewership.  The headlines will never tell you that the shutdown is temporary, and for the 99.85% of you Americans that are not furloughed federal employees, you can turn off the TV and go outside and play.  You won’t miss anything.  Eventually our government will resume normal operations.

So far, I have suffered only one very minor inconvenience since the shutdown.  I wanted to cite some up to date household income statistics.  The US Census provides statistics of this nature on their website.  Whoops!  The website is closed.  I had to use wikipedia instead, so there really wasn’t much inconvenience to me personally.

Real Impacts of the Government Shutdown

Since I haven’t been paying attention to the news, I had to seek out information on the numerous ways in which the government shutdown will affect everyday life.  The information was incredibly easy to find, and Google quickly introduced me to this CNN article that promised to reveal ten ways in which a government shutdown will affect your daily life.  This is the model of efficiency – I was able to save dozens of hours of time by not watching the news and avoiding news on the internet related to the Shutdown, yet when the need for information arose, I had access to that information within seconds.

The CNN list of ten impacts to your daily life really boils down to this:

• Life as a resident of Washington, D.C. might suck soon.  Trash collection and other municipal services will eventually halt due to lack of funding, since the D.C. municipal budget is tied to the federal budget.  It’s pretty scary to think that 0.2% of our country’s residents will face a temporary interruption in municipal services.  For the other 99.8% of Americans, life will go on as usual.
• Government loans or payments might be delayed or postponed.  Specifically, SBA small business loans, loans requiring federal approval such as FHA or VA mortgages, and veteran’s benefits payments.
• Getting a gun might be delayed.  ATF may not process FFL permits promptly or at all during the shutdown.
• Federal parks, museums, and zoos are closed.  Your vacation may be moderately screwed, although there are always other things to see where ever you are going.

The CNN article mentions things that won’t change:

• Obamacare
• US Postal Service delivery
• Social Security payments
• Tax collection
• Treasury bond issuance
• The military
• Federal employee pay (in past closures, all feds received retroactive pay for furloughed periods)
• Passport offices issuing or renewing passports (they are fee supported and are staying open).

I would wager CNN prepared a non-exhaustive list of impacts to our lives due to the shutdown.  I would also wager that 99% or more of us won’t see much impact beyond a temporary inconvenience.  Hey, sucks to be part of the 1% impacted, but that’s the way these disasters and catastrophes work.  Unfortunately, this disaster is completely man-made.

For federal workers or contractors who won’t be getting a paycheck for a while, the shutdown will be a more significant inconvenience.  For those workers who have no savings and no backup plan in the event of job loss, life will start sucking pretty quick.

The only advice I can provide to those workers is to learn from the shutdown.  Prepare for potential job loss, reduction in pay, or reduction in hours.  Spending less than what you make will help.  Keep an emergency fund for situations like this.  An emergency fund plus unemployment benefits can go a long way in removing financial stresses when the unexpected happens.

For everyone else, please proceed with your lives.  Turn off the TV and ignore the news headlines that read like a play by play summary of a tennis match (except the fate of our country is bouncing back and forth over the net).

The Government Shutdown will end eventually, and until then, there is no reason to waste excessive amounts of mental energy dwelling on what if’s and how much our elected officials suck.  Go read a good book, or pick up that project you keep putting off.  You won’t be missing anything.

Government Shutdown And Your Investments

Some investors think they have to constantly monitor news sources to make sure they are in the know before everyone else.  They think that instant access to news is critical to successfully implement their investment strategies.  There might be some institutional investors that are very slightly successful at incorporating real time news into their investing strategy.

For personal investors, they are deluding themselves into thinking they are pro traders by keeping on top of the news.  They feel that knowledge is power, and who doesn’t want power over their investment results?

Here we are, thirteen days into the shut down, and the stock markets are over 1% higher than they were on the day before the shutdown.  There is no way to know which way the stock market will go in the short term.  I accept that fact, and haven’t touched my investment portfolio for over a month.  I might lose a little bit on paper if this shutdown drags on.  Or I might miss out on a big run up in the market if I sell out.  There is no reason to waste excessive energy trying to figure out something that is unknowable.

So there you have it.  Time to do something more fun than worry!

Did I miss the mark here?  Anyone suffering big time from this shutdown?  What steps can you take to minimize future suffering if something similar happens again?