Is this just another false start?

Maybe.

Dept of Labor was supposed to publish their monthly payroll report on the 5th.  Now that they seem to have suspended their tantrum, and are no longer spending money to deliberately inflict pain on the citizenry, they got around to actually doing their job.

Seeking Alpa notes that the numbers are not good. The consensus was that we should be treading water, but the economy actually got measurably worse instead, with an increase of only 148k jobs (remember, we need 175k-200k to tread water).

And in Manufacturing the numbers are dismal as well, as manufacturing employment remained flat (total growth for the past 12 months is about 30-40k, instead of the 180-240k we need). 

The trade balance for the past year shows we are still losing money by consuming more as a nation than we create (hey, that would be a Keynesian dream, and would fix the economy, if Keynesians weren't full of horse hocky), to the tune of near $400B a year.  Reported plans for reducing the Fed's Quantitative Easing seem to have evaporated with this report, and the situation in other countries isn't any better, and there is talk that this economic up cycle (the one I predict will last maybe though the end of next year) might be just another false start.

The Next Government Budget Battle

Will be over the debt ceiling.   And it began about two weeks ago. Both Democrats and liberal Republicans (RINO's, anyone?) believe we need to just raise it indefinitely.  So that we can continue to spend and "not default on our debts."

Think about it.  If you maxed out your credit cards, then called one bank and said they HAVE to raise your limit, so you can use it to buy stuff, and oh, yeah, pay the minimum payment on the other card, how would that fly?

But that is what we are doing.

In the mean time Obama's proposed solution:  "give me everything I want, and then I will negociate what more I will take from you, in addition to that."

Before the meeting, Obama had told CNBC that he wasn’t in any mood to negotiate on what he considers to be core responsibilities of Congress and will talk about other issues once the government is open and the debt-limit increase is secured.
“Until we get that done,” Obama said, “we are not going to engage in a series of negotiations.”

 http://www.politico.com/story/2013/10/government-shutdown-2013-day-two-97719.html

There is a plan to just simply "suspend" our debt ceiling for the next year.
Oh, right.
 Like giving a drunken sailor on shore leave an unlimited credit card.
What could possibly go wrong. 

The expected result is another 1100 Billion in debt in the next year. For a total of 17,700 Billion in debt.

Sooner of later the chickens will come home to roost.

Maybe in the form of hyperinflation.

But it could be something else.
We will just have to wait and see.

Government Shutdown and the Economy

Friday morning about 8:30, the Dept of Labor was supposed to publish their monthly payroll report.  This, in my opinion, is the most important data the government publishes on the performance of the US economy.

Instead, the DoL was silent, and money was spent barricading off parks and memorials, many of which would normally be free and accessible to the public. In other words, they spent more money on them, for the sole purpose of creating an inconvenience to the public.  This spending of taxpayer money for the purpose of annoying the public was, of course, vengeance against people who think the government spends money on things it should not.

No matter. Commercial elements that study the economy for the purpose of, themselves, making money, tell us the payroll report would indicate we are still treading water.  Because business continues to become more and more efficient, the US economy, as a whole is gaining, so we are in a sort of up cycle.

As I indicated in last month's post, we can expect this upcycle to last about 18 months, more or less, and begin to collapse on itself again sometime around the end of 2014.  This is kinda bad news for the Republicans and other fiscal conservatives, since, if they win the election in 2014, and take office in Jan 2015, they will be there to blame when we go into a downcycle in 2015 and 2016. 

Well, more on this later.