As I write this, from the comfort of a nice lifestyle in Ireland, there is a partial shutdown of the US government.
While my wife and all of our kids are American, not one of them has a family paycheck dependent on government employment.
So I have the luxury of looking at this situation philosophically and treating it as a way to learn via observation from afar. And I think there is a lot to see and learn from.
But I also have a bias.
I think the Global Financial Crisis of 2008 did nothing to fix systemic financial problems.
I know for a fact that the US National Debt is about $67,000 for every man, woman, and child who is a citizen. I know the forward promises for Social Security, Medicare and other unfunded liabilities add another $998,000 of responsibility for every citizen to pay.
I don’t think that money can ever be paid to the people it was promised. I think there is a major government default in the future. I think ‘winter is coming.’
So my bias is, I think this little shutdown is a flea on the back of an elephant, in terms of the mathematical certainty that is coming.
Here’s a Look at the Help You’ll Get From Uncle Sugar
Right now there’s about 800,000 federal workers who are about to miss their first paycheck.
So their government has come to the rescue with professional advice on how those employees can survive without any income. Here’s some highlights from the Coast Guard.
Hmmm. Garage sales and selling furniture and appliances via Craigslist is a short pipeline where you’ll get pennies on the dollar.
Babysitting and dog walking are great for the kind of money you made as a teenager. (And check with your insurance company about the liabilities of providing for-pay childcare.)
Being employed as a Mystery Shopper might not be a high demand job in the retail apocalypse that will surely occur after a government financial default.
I like the ideas of leveraging a hobby or other expertise into a business. But I can tell you with authority that doesn’t happen fast enough to make your next mortgage payment. Or the next one after that.
And here’s some form letters provided to federal workers by the Office of Personnel Management.
Most of them use wording like: “As we discussed, I am a Federal employee who has recently been furloughed due to a lack of funding of my agency” then go on to ask for exceptions to the terms and conditions of their financial contracts.
If you expect to collect Social Security, Medicare, or a government pension think about the very bureaucrats who defaulted and didn't send you your money giving you these same tips.
Imagine having to write a similar letter after a general financial meltdown.
“I am a Social Security recipient who has recently been cut off due to a lack of funding of the Social Security system.”
“I am a retired school teacher who has recently been left with only 28 cents on the dollar due to a lack of pension funding by the state of Illinois/California/take-your-pick.”
“I worked for a private company with contracts with the Local/State/Federal government. However due to a shutdown of that agency, I am without a job or income.”
Good luck building a sustainable lifestyle that depends on the generous nature of lenders, landlords and shopkeepers all dealing with the same financial crisis.
All economies ebb and flow. There are fat times and lean times. Right now, many important indicators show governments are operating in unsustainable circumstances, mostly on borrowed money that has been PROMISED TO YOU.
Some of these promises won't be honored. When they aren't honored you'll get a letter from your government suggesting you do what Coast Guard workers (and others) are being told to do right now. That advice is basically worthless.
Make a better plan. Learn how to get a side income going right now. Do it with an online business so you can keep your existing job as long as you want. Don't wait for one of these ridiculous letters, start gathering the knowledge you need today.