President Obama has stated that if the debt ceiling isn’t raised that Social Security and veterans checks might not go out! This could happen but only if Obama directs Treasury not to pay those checks. So I think this is a very clumsy threat and would prove the SS lock box is a myth. Plus you have to remember that SS also includes disability payments and that has grown very large in the last few years. So we are looking at a significant part of the population completely dependent on the checks. Very little would go into the Medicare system because SS takes about $125.00 per month from each check to pay for it, no check, no medicare payments! If I am reading the stats from Social Security there are about 55 million people receiving some kind of benefits. I can’t find the numbers for vets but I’ll guess about another 5 million to give us a round number of about 60 million US citizens who won’t get paid in Feb/March in 2013. That would be a lot of very angry as well as desperate people to try and contain. Not to mention all of that “money” that can’t be spent, would really hit the local business of towns and states very hard.
But lets just say the Bamster follows through and no checks go out and you, like me are on SS or vet benefits what are you going do to deal with no money hitting your bank account? Do you have an “Emergency fund” that will cover your bills for at least a month or more? Rent, Utilities, because if you pay late you will get hit with higher fees. Perhaps they will charge you extra to reconnect your basic utilities. Is your phone or cable/internet under a contract? There is usually a big penalty for canceling those items under contract. If you don’t pay your car insurance on time, you often have to pay a higher premium because the insurance lapsed. It can get very expensive, very fast if you don’t pay your bills on time. You don’t want to get caught by those payday/title loans because the the interest will just crush you and that’s if they accept that SS will start paying you again in a month or two.
I figure it is time to do another test this one will be financially based. While I don’t think the PTBs will follow through on this threat. Let us imagine you know the Stock market crashes and there is a bank run on Feb. 15th and you have about 30 days to get ready. Think about what your plan would be to deal with all banks and ATM shut down for a week.
- I have already started paying a few bills a month early. Nothing big, just things like car insurance, Sat TV, my internet. None of these bills are under contract so I can cancel them if needed with no penalties. I have plenty of DVDs, books and projects to keep myself entertained. Paying an extra $26.00-$50.00 a month is a lot easier than trying to make an extra house payment.
- Being debt free is a huge help in this situation but if you are still working on those debts an option could be to make a smaller payment and stash some cash away for next month’s payment so you don’t get hit on penalties or interest. Or you could pay ahead on next month’s payment and save some interest costs.
- I will make my power payment this month and I have a backups for heat and water. But my water and trash bill comes due in the middle of Feb. so I’ll pay that bill early. I have added plenty of fuel for cooking, heat and lighting already on hand for a couple of months. I already planned to top off the gas tank this week and get another jug of gas so I should be able to go without buying any gas in Feb.
- Food: I have few little sale items I want to get like some canned dog food on sale at Family Dollar, add a little more Toilet paper from Big Lots and some more cold remedies from the Dollar stores. The big item will be getting the grains to start my first 55 gallon drum as well as the cost of the drum itself. I don’t see any reason to change that part of budget.
- I have an “emergency fund” and could pay all my bills for a couple of months. But I prefer to do everything I can without touching the “fund”. Because if the idiot PTBs do go through with this brilliant plan things could get real ugly, real fast! If you can keep some “Mad Money” of a couple of 20 dollar bills in your wallet/purse just in case they are that stupid.
- Overall I don’t need to change all that much on my budget. I’m kinda sorta planning on getting my vet benefits on the 1st of February but just to cover paying a bit extra on some bills and if I find out I have missed something or sales. You can’t get crazy or go into a panic like have seen with guns and ammo. If you can’t get something you need on hand, suck it up that you missed it and start working on a way to mitigate the problem. I don’t think I will ever get everything I need or want, but I think I have enough for a short term disaster and the tools/skills on hand to keep working on long term solutions.
Even if you don’t get any of these benefits you need to plan ahead. These are people who tend to spend the money as soon as they get it and live paycheck to paycheck. They won’t be going to the store, the gas station, the local restaurant. Power companies and all utilities will also lose a lot of revenue and taxes won’t get paid. Hospitals and doctor offices won’t be seeing those patients, car insurance and garages won’t be seeing any work from these people either. That is why I think this threat from Obama is stupid at best and dangerous at worse, because this could crush the US economy. Just look at Greece for an example and all they did was reduce payments and people are cutting down trees in the park trying to stay warm and can’t buy an aspirin tablet at any price.