Dear Reader,
Yesterday, my daughter asked me, “why is the government shut down? What does that mean?”
Here’s what it means:
I explained to her that the government shuts down non-essential employees.
The military, for example, still work full time.
Non-essential employees, however they define that - people at the Bureau of Labor Statistics, the Federal Reserve, stop getting paid during the shutdown, but receive back pay when the shutdown ends.
But national parks shut down and a bunch of stuff like that happens.
As to why, I told her, the core of the fight is really Obamacare.
In Trump’s “big beautiful bill” he basically stripped extra provisions from Obamacare, which democrats are trying to reverse.
Democrats are saying, there’s 24.3 million people on Obamacare, and without these extra provisions, out-of-pocket premiums are going to jump from $888 to $1,904 on average next year.
Look, Trump is cutting spending, and cutting spending for Obamacare is a big part of that.
So the democrats are shutting down the government to go out there and push the Republicans to restore that spending, which would blow a hole in Trump’s big beautiful bill and make it meaningless, and just a spending bill with no cuts whatsoever.
The last government shutdown lasted over 30 days.
What’s challenging about this is the two sides are philosophically pretty far apart.
The Republicans philosophically say they believe in smaller government, even though that’s debatable.
The Democrats philosophically say to the Republicans they think they have the high ground here.
They philosophically are saying, you know what? You don’t want to face voters after watching their premiums double in the next year.
So both sides feel very entrenched in their positions.
Who knows if this government shutdown works?
But I can tell you one thing.
Democrats want to reverse all the cuts to Obamacare.
Their side wants to do that.
Republicans have a lot of Obamacare recipients in a lot of red states out there - Georgia, Kentucky, Louisiana, Missouri, you name it.
As it relates to investors, the markets have gotten used to the dysfunction of government shutdowns over the past 10 years.
The way it affects us, specifically, is we have a Capitol Hill event we’re participating in on rare earths and critical minerals - America’s supply chain vis-a-vis China and our weapons.
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We’ve been working with people to put that on for some time.
We’ve invited our Alliance Members to join us on Capitol Hill in this closed-door meeting with government and industry leaders in defense, and we’re hosting a private party afterwards for our Members as well.
So this shutdown could actually affect our plans.
Will the Capitol be open? We have to find out.
Meantime we have Democrats waiting for Republicans to blink when they realize they’re going to be sending out letters to millions of people saying that their premiums have doubled…
And Republicans believe the Democrats will blink. There’s a very big divide between the two and it could take a long time for this to settle.
We will see.
We’re not in charge here. We’re in the “effort” business - God’s in the “results” business.
So we’ll see where that takes us.
In the meantime, get caught up on Trump’s secret military project - the real reason he summoned Elon Musk to the pentagon.
Go here for the full story and the three stocks to buy now before Congress approves the Pentagon’s $1 trillion budget.
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