The government shutdown is a sure fire way to reduce government spending, while temporarily cutting the pay checks for millions of Americans… Obama Care is designed to reduce the amount we pay for health care impacting a huge profit-center industry that has been milking businesses and individuals for years with the highest costs in the world. Time will tell if the new health care plan will work… One way or another the federal government will temper its spending when the political parties work out some deal—actually shrinking spending is not in the cards… States and local governments, meanwhile, curtail services and eliminate what have been good paying jobs with generous benefits... And those public pensions are the next in the cross hairs as we have been pointing out.
So when you assess what's happening to government and government spending the trend lines clearly point to less—and that means less flowing into the economy whether to pay doctors or insurance companies or to compensate as many public employees and government contractors.
Federal Reserve workers—the most essential of government employees--keep the whole system afloat meanwhile with the low interest rate tonic swallowed hook, line and sinker by the stock market… Housing gets better, but in most markets—save the ultra-premium neighborhoods in 24-hour gateway cities—prices are still well below peaks and rising mortgage rates may snuff out some of the demand momentum.
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