Government Shutdown: The Aftermath
On Thursday, October 17, the government officially lifted their shutdown. This shutdown was only 16 days long, so the country’s record of a 21-day shutdown has not been broken. Although everything in the government is up and running again there was still a price to pay for having shut down in the first place.
An Agreement is Made
Congress passed a deal that agreed to fund the government for a few months. The deal does not address any of the differences in opinion on the budget between the Republican and Democratic parties. Everything is not all fixed yet, but at least the government can get out of the water for a short time and not become further entrenched in debt.
Only a Short-Term Solution
The solution is temporary and the deal will only last through January 15, so after that it’s all up in the air again. It is likely that the government will face another shutdown. If that is the case, the costs of these shutdowns are all going to add up, and the economy will be in some serious trouble. Many think that in a few months the same issues will be back on the table being debated. However, President Obama, when asked if he thinks that will be the case, said “No.”
The Economic Effects
After the shutdown, 0.25% of economic growth for the fourth quarter was lost and the economy lost up to $24 billion in revenue. The government only took information through October 12 though. It is likely that these numbers are higher and that the harm to the economy from the shutdown is greater than the current numbers show. The shutdown of ’96 only cost $2.1 billion of today’s dollars which was $1.4 billion then. That’s including the cost of paying back the furloughed workers. It’s unlikely that this time around furloughed workers will be compensated. Now that the U.S. economy is back in the game their economic growth for the fourth quarter is predicted to be about 2.4%. Before the shutdown, that growth was predicted to be 3%.
Federal workers have all gone back to work and as of now things may seem back to normal. Many people have lost faith in Congress, and it’s no question why. Hopefully, in a few months the country will not be facing this issue again and Congress can do their job well so that Americans don’t have to be concerned. Leave a comment on whether not you think the government will be right back in the same situation that they just got out of.
Posted on October 28, 2013, in News, Top Stories and tagged $24 billion, 2013, bruso, Council of Economic Advisers, December, Democrat, Economic, Economic growth, Economy of the United States, Federal government, Federal Reserve System, government, Government shutdown, Obama, October, report, Republican, roxanne, Roxanne Bruso, Shutdown, Standard & Poor, temporary, United States. Bookmark the permalink. Leave a comment.