Summary: First of all, what is a Federal Shutdown? Typically, any program or agency thats a part of protecting life and property such as air traffic control and food inspections is kept operating but much of the federal government would be shutdown. The money those agencies would normally spend would be postponed. Hundreds of thousands of federal workers would be forced to leave work without pay. But every shutdown is different and the White House is very discrete about whats essential and whats not. Effects of a shutdown for just two days could cost the economy two-tenths of a percentage point of annualized growth during the fourth quarter. That basically means a smidge. But a shutdown lasting three or four weeks could cause some serious damage. Specifically, reducing GDP by 1.4 percentage points for the quarter which is a lot. The last time a shutdown that long occurred was in 1995 but the economy was much more stable back then with the tech boom. So much bigger consequences are to be expected this time. Some of which could be uncertainty which will make companies less willing to invest in plants and it could force the Fed to continue with experimental policies. Also consumer, investor and business psychology, will play a big role in the effect in the economy. But theres no telling what the psychology will be if the shutdown happens at the same time as the debt sealing.
Analysis: I honestly don't know what to think about the situation. I feel as though I don't understand enough about what has happened in the past, whats happening now, and what could happen to say my opinion on things. I don't know everything about the economy or how the government works so how can I say what they should do? But I do know that there are many problems with this country, and with every other country too, and that there are no easy ways to solve any of them but some of the things that have to happen might not be completely desirable.
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