Here are questions about the shutdown posted by Associated Press reader Ryan S.:
How could the shutdown affect the U.S. economy?
Federal government shutdowns usually do not leave significant economic damage. But it started on Wednesday looks more dangerousEspecially since he’s the president. donald trump Threatens to use conflict to permanently eliminate thousands of people government jobthe economic situation is already unstable.
So far, financial markets have avoided an impasse where Republicans and Democrats have only recently failed to agree on a budget and keep the government running.
Let’s look at the various possible economic effects.
1. A few days: There may be some fluctuations in the financial markets, but if funding recovers before too long, the fluctuations may not be significant. Ideally, workers will receive their wages back and there will be no significant economic delay.
2. Long-term: Federal employees will be furloughed and the federal government will defer some spending during the government shutdown. But once the funds are returned, workers will go back to work to collect the owed money and the government will belatedly spend the withheld funds. It’s quite a wash.
3. Very long-term: In the event of significant disruption to sectors such as: air travel It could mean further problems for the industry due to circumstances related to the shutdown, such as security guards and air traffic controllers falling ill during the 2018-2019 shutdown. But even with a 35-day shutdown, the longest in U.S. history, the Congressional Budget Office estimates that: Only 0.02% shaved off U.S. gross domestic product, the country’s output of goods and services since 2019.
President Trump has also threatened to permanently eliminate thousands of government jobs during this shutdown, so if that happens and a new class of people immediately lose their jobs, it could disrupt the national situation. already unstable economy. However, it remains to be seen whether such layoffs will occur.
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