Did the US Shutdown Affect the Global Economy?

Government shutdown, in American politics, refers to a temporary halt in government services when lawmakers cannot pass the necessary funding measures in time.

It's been the first Government Shutdown since United States federal government shutdowns of 1995–96 during Clinton presidency. 

After the US Government went into a shutdown on October 1st, 2013, and only essential services functioned for 2 weeks, the US Congress voted on the night of October 16th, 2013, to avert a debt default and allow the government to work again.

The US financial year ends at midnight on September 30. Under US law, a new bill to approve funding for the next financial year must be approved by the House of Representatives, the Senate and the president before the financial year ends. This has not happened this year. In such a situation, the government does not have the legal authority to spend money and it is called a shutdown. The government stops providing for all but essential services such as police, fire fighting, social security and Medicare payments.

The Economic Impact of the Government Shutdown

According to the Committee for a Responsible Federal Budget (crfb.org) all analysts agreed, the longer the shutdown , the greater the negative impact.

How it will affect US citizens? 

  • Essential services will continue. The military and other agencies involving safety and security would continue to function.
  • The President's $400,000 salary will be paid. Congress wont have a pay cut.
  • About one-third of the government will shut down. About 800,000 of federal employees will be sent home without pay.
  • National parks will close. The environmental protection agency, NASA and other agencies will close most operations.

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