I agree the GoFundMe is over the top if it’s just to take a vacation, but despite what people think, if she’s a construction contractor, there’s no money made until the project’s over and fully paid. And even then the profit might be 10-15% tops and that money is already earmarked for another project.
Also, a two-week work stoppage could mean a month or more before the contractor gets paid because even if her payment was at the top of the pay queue (having been approved by all the channels to get there), it will take time for the money to start flowing back into the chain, then the workers have to trace back to were they left off, possibly have to start the process all over again because the approvals have expired. And unless massive overtime is approved and worked, the backed up queue will continue.
Edit: While payments of subcontractors of a general contractor of a government contractor can be held to “We’ll pay you, when we get paid.”, the laborers and vendors have to be paid regardless if the sub or general contractor is paid by the government or not.
The key in supporting this idea is whether or not the government workers are providing anything of value – bear in mind just because you don’t perceive them as having value doesn’t mean that they don’t actually have value. Admittedly, it’s not an easy question to answer (debate to resolve) without actually having specific examples to cite.
If there are known redundancies within a bureaucracy and the bureaucracy itself lacks value, then there might be an argument for saving the money and spending it elsewhere, or not spending it now and putting it toward the growing financial obligation of paying bondholders.
But where the real impact is felt is when government workers are providing things that taxpayers actually use. Maybe it’s paying contractors to start roadwork, picking up garbage on federal property, keeping national parks open to travelers – not saying these are, in fact, examples, but they could be.
Also keep in mind that government employees spend most of their paycheck (save maybe their taxes) in the private sector. So the shutdown is hurting private sector spending - acutely in some areas, less so in others. In any case, a shutdown isn’t without consequence.
Government employees are paid with tax dollars. Tax dollars come from the private sector. Money which is not taken in taxation is going to be spent or invested just as surely as money which is taken in taxation, given to federal employees, and then spent or invested by the federal employees.
Taxes are a necessary evil. The shutdown may be a good idea or a bad one, but let’s not pretend taxes do things that they don’t.
While that may be true, I think the point is that local economies suffer when blocks of workers are without pay through layoff, plant shutdown, or government shutdown. The money needs to flow.
Might not apply to this case, but contractors on federally funded jobs are required to put up bonds for twice the cost of the job*. The bonding companies judge how much bond a company can hold. Other agencies and companies also require bonding. If a contractor is at the end of their bond capacity, due to a federal job or jobs, they won’t be able to pick up another job to fill in while they’re not being paid for the already bonded work.
Two bonds. One is released when the work is accepted (it’s purpose is to hire someone else to complete the job if the contractor flakes out). The other is released when the warranty period expires, usually one to three years (it’s purpose is to hire someone to make repairs if what was constructed needs repairs due to bad materials or workmanship).
A look at lottery winners and pro athletes would support this assertion. I don’t think frugal people who are in paycheck to paycheck situations should be ignored though. I think ideally there should be more focused effort in public policy to help those who can be helped in the way they need to be helped; it’s the right thing for a technologically advanced civilized society to do in my opinion.
I’m not viewing these issues in any sort of moral way - I’m looking at it from a purely practical perspective. If financial issues are caused by mental inbalances then those would need to be addressed to solve the problem. Nowadays it seems that everyone wants to paint with broad brush strokes and fit everyone into large categories.
I can certainly agree that some currently-poor people would find real long-term benefit from a windfall. While being conscious of your warning about painting with broad brushes, I think that oftentimes these people are already demonstrating disciplined behaviors and habits more-commonly-found in their middle-class colleagues, and stand excellent chances of lifting themselves out of poverty anyways.
Recent surveys indicate that somewhere between 70 and 80% of Americans live paycheck to paycheck. This means it is not a concept just related to the low income. Many middle income and high income earners spend as much as they earn resulting in them being one paycheck away from financial problems. What are they spending all of their income on as opposed to saving? Most likely the things that advertisers promote in marketing campaigns.
When I was in my early 20’s, fresh out of college, my father gave me some sage advice, when I was home visiting. My parents were not wealthy by any means. They were lower middle class, but their modest home was nearly paid for, my dad had saved and they had a few nice possessions, like a few acres of land, a boat, and camper. He reminded me that it took him years to accumulate these nice things and that I shouldn’t expect the same lifestyle that he and my mom had, just because I had a new job. That I should be patient.
I know too many people that want what they see people on TV have. They want to live the same lifestyle or close to it, that celebrities have. They want to drive luxury cars or SUV’s. They want a large home with a flat screen on every wall.
People do not wish to forgo these types of things and save for their future. As a result, we have people who set up GoFundMe accounts when their pay is cut for a few weeks, so they can continue their “beyond their means” lifestyle.
The money flows anyway. Certainly a government shutdown hurts the local economy in Washington DC, but it helps the local economy where the taxpayers live.
Taking money from Person A and giving it to Person B to spend doesn’t stimulate the economy overall more than leaving the money in A’s pocket.
Taxes are necessary, we need taxes, we need a government (although we can differ on how much and what kind). But taxes do not stimulate the economy overall - they are a deadweight loss.
What does a shutdown have to do with taxes? Several workers (like my wife, for example) are currently working without promise of being paid fully until the end of the shutdown. Others aren’t working at all. Most or all of these workers will be paid when the shutdown ends, with tax dollars that are coming into the government either way. It seems to be a pretty mundane statement that a shutdown harms the economy, since taxes don’t change but lots of workers aren’t getting paid and thus don’t have money to spend.
Thank you- I have often been cynical about the pages of GoFundMe but I thought I just had a heart of stone. More to the discussion, we don’t live paycheque to paycheque (sorry but my spell check picks that up). I did many years ago but I know have very credit card bill, expected bill etc on a spreadsheet and always pay our utilities in advance.
I like having a bet on the horses but if I know if we have some bills coming up (say annual bills not on spreadsheet) I can refrain for months from not having a punt. However it took me a long time to realise how I needed to handle the situation- and a lot of time being broke and walking to work. I have never had any windfalls as such however I guess I am fortunate in that I have managed to pick up snippets from other folk about saving money and taking them on board.
My younger self would never have done this (I hate my younger self). Other people may not be as lucky in getting such advice.
I grew up the single child of a single mom who worked minimum wage (mostly waitress type jobs) jobs to make ends meet. Many times those ends never met close enough, we were always paycheck to paycheck. To this day my mother’s situation has not changed, she never has achieved financial stability or been in a comfortable economic situation and she is nearing retirement age.
I was following in those footsteps, working better than minimum wage jobs but frankly not enough to do much more than own modest vehicle, rent an average apartment, and not enough to have any kind of savings or emergency. My future earning potential was capped at a fairly low ceiling based upon the type of work I was doing. Anytime an emergency happened like unexpected car repairs or medical bills I’d be in a cycle of robbing Peter to pay Paul because I didn’t know how to budget, to save money, to plan ahead.
Fortunately, in my mid-to-late 20’s I made the decision to quit my job and go to college full time. I used student loans and an RA position with the college that provided a place to live. I could work part-time making an okay hourly rate and still focus on my education and by my 2nd year in college I was working paid internships in my field until graduation. Ultimately, this provided me with a career and earnings far above any I had even dreamed of. I’m not rich by any means but I do better than most. Yet, it is still a challenge. I did not have examples in my life of how to successfully manage money, to invest and save, etc. I’m almost 50 now and although I’ve overcome a lot, not having learned from parents or others has cost me a great deal even after I started making better money after college. I made really bad decisions in difficult economic times post-college that now in hindsight the errors are even more regrettable. My retirement savings is not anywhere near sufficient for maintaining my current lifestyle post-retirement. I worry how I’ll pay or help pay for my kids college educations.
I pray that in what time I have I will show a different example to my own kids. To a large degree I broke the cycle of poverty/near-poverty from my mother to me but I feel to some degree I didn’t necessarily learn to manage money better to improve my situation. I just got into a fairly good paying field and found a niche to make a better than average living.
Are you under the impression that the government shutdown means that your taxes stop too? I don’t believe that is a feature of the government shutdown?
My Dad was a CPA and only worked out a budget when there was a large change in circumstances, I do the same. If you are good with your spending habits, you don’t need to track; if you don’t even know how to make a budget (and a lot of people don’t), being told to make one won’t be any help.
If the statement were changed to ‘a partial government shutdown creates a very slight fiscal tightening effect which is reversed as soon as the back pay is issued’ I could agree.
But the wording ‘hurts the economy’ sounds like arguments not to reduce the deficit because that would ‘hurt the economy’. A thought through reduction in the size of govt would not necessarily be ‘bad for the economy’ just because the same taxes continued to be collected.
These ‘partial shutdowns’ (and this one is even more partial than debt ceiling induced ones since most govt departments were funded) are bad because of the political dysfunction they show and the longer term potential effect of chronic political dysfunction on the US economy. A tiny % of the workforce not getting paid for a little while then having it made up is unpleasant for those people, but has a negligible effect on the economy.
Also, according to this (scroll down) only 13.4% of civilian federal government employees work in the DC area, whereas 83.3% of civilian federal government employees work outside of the DC area.
We live paycheck to paycheck.
Once the car is paid off (another 22 months) we’ll have more money to save. Why are we paying for a car when we don’t make enough money?
We needed AWD for winter driving. We lived in a very small market, so there wasn’t a huge selection of new or used cars around.
We got a new Subaru, knowing it will last us at least 10 years and probably more. It has far more potential for a long life than the car it replaced.
We had good jobs in 2008-2009. They evaporated when the economy crashed. We have struggled since then to find and keep decent jobs, and have decided to settle for jobs that are more secure, even if low-paying.
You can talk about life choices, and we have made some poor ones, but we also got some very poor guidance. When we were in college, we were assured that we would never have problems fond a job, and would never have to worry about it again one we got hired. If we had known what garbage that was, we both would have chosen different career paths.
Right now there is a hiring boom, but you can’t get a job if you don’t have the right qualifications. We’re either unqualified or overqualified for most jobs around here. We’re too old to get hired as novices, and we are not going to take out another loan to get the education needed to get the good job, I still have a student loan for a degree that was snake oil to my career.
We only have one car, and Mr. CK walks to work most days. We had to choose an apartment close enough to his place of work that allows him to walk. (He rode his bike once, and someone stole the bicycle seat.)
We have a “budget” but it’s sketchy since we have no idea what our weekly pay will be. If we don’t get enough one week, we are in big trouble.
I’m still smarting from being told by one financial expert that all I needed to do was find another job. In Phoenix, AZ in 2007. It was an insult to anyone who was aware of the economic situation of the time.
The bonds are usually only required for the general contractor which is usually a very large company. Sub contractors and below usually don’t have to get bonds unless they’re doing a very large (100’s of thousands or millions) portion of the full contract. Few small contractors (if ever) are the general on federal government jobs, they’re almost always under someone else much larger.
I worked for a company that did playgrounds as a subcontractor for a very large (billions) general contractor and we never had to get bonds for our work, typically less than $150K tops and usually much less.