Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

"A strong conviction that something must be done is the parent of many bad measures."
  -- Daniel Webster

Friday, April 08, 2011 :::

People whose pay will be delayed by a government shutdown:
The O'Donnells just bought a house in LeRoy, New York, and Emily fears she won't be able to pay the mortgage if there's a shutdown. She won't be able to afford medication or specialists for her daughter, who has chronic ear infections. And if she uses up the $1,000 in her bank account, "my plan is a food kitchen."

"I really don't think they understand the scope," she said.

"And we're not the worst-case scenario, either. We have a little money in the bank."


Lena Bourrillion is one of those who would feel the lost paycheck immediately. She works at a dialysis center, and her husband is an army sergeant. The couple relies on both paychecks to pay the bills. With two kids and three dogs, Bourrillion says they will have to ask family to borrow money or get a high-interest loan from a bank.

"Immediately we will have to borrow money," Bourrillion said. "There will be late fees and our credit report could be affected."

She says her husband was just notified yesterday by a supervisor that he may not be receiving his next paycheck.

"You should start relying on old money, not new money, his first sergeant told them," Bourrillion said. "I thought that was the real kicker."

"Living a military life it doesn't really give you the option to put away money," agrees Amy Tersigni, whose husband is currently serving in Iraq. "You don't get to put reserve because you live paycheck to paycheck. You pay your rent, you pay your bills, you feed your kids and that's it. You don't have extra," she said.

Thoughts, somewhat unkempt:
  • There's a move in the last few years into opt-out (rather than opt-in) 401(k)s; perhaps the same should be done with savings plans?
  • I don't know how much you're making in the military, but I'm absolutely certain that there is someone somewhere making 5% less than you and getting by. I simply don't buy "You don't get to put reserve", or however that translates into English.
  • I do have some sympathy for the observation, later in the article, that "Military jobs are stable." Especially if someone has chosen a job in part because of its stability, but even if one has merely happened into one, it is less irresponsible not to have a cushion than it would be in a job where your employer can go out of business.
  • If a bank with a poor public image — I'm kind of thinking Citibank here — were to offer short-term interest free loans to families of soldiers in this position, I bet they would accrue public relations points more valuable than it cost them.
  • A question: are savings bonds redeemable while the government is shut down? Those have been sold by smart people (and me) as a good vehicle for emergency savings funds, but, as was illustrated in 2008, if your hedge disappears exactly when you're going to need it, it's not much of a hedge. I then have even more sympathy for government employees who thought they had savings, but aren't able to access it.

::: posted by dWj at 1:04 PM

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Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.

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