As we reach day eight of the government shutdown, this Savvy Student can't help but wonder what kind of financial impact this frustrating and fruitless occurrence will have on the country as a whole. Whether you're a Democrat, a Republican, an Independent, or a member of any other possible political party, we can all agree that the financial effects of a government shutdown are not going to be positive. The last government shutdown occurred eighteen years ago and "the price tag of $1.4 billion, sometimes converted to $2.1 billion in today's dollars, has been wielded by politicians, pundits, and the press as a reason not to halt all nonessential government functions" (The Wall Street Journal). Yet, here we are eight days into a government shutdown that has no quick and simple ending in sight. While we wait for the shutdown to end and the final financial impact to be revealed, Savvy Student has been doing some research and gathering some information.
The general consensus about this government shutdown seems to be that there will be no drastic effect on the economy. However, the effect on the debt ceiling could be catastrophic: "The government could run out of money to pay its bills as soon as the middle of this month if Congress fails to raise the borrowing limit" (The Washington Post). If this were to happen, it could result in a permanent increase in the nation's borrowing costs.
While the general consensus may be that there will be no drastic effect on the economy, there is still a definite effect! Many types of businesses that rely on federal works may not be able to make up the revenue lost during this government shutdown. Additionally, sources of revenue like tourism will undoubtedly take a hit with national museums and parks closed until the end of the shutdown.
If you're a person who is more into figures and numbers, Savvy Student has an image from the Wall Street Journal that may put a few of the financial implications of this shutdown into perspective for you. The image below demonstrates some of the anticipated financial hits that will be taken by some of the biggest names in the country, such as Wells-Fargo and IHS Global Insight.
After reading the facts, opinions, and tentative research of those who studied the shutdown that occurred eighteen years and those who are focused on our present-day shutdown, this current predicament does seem rather daunting. Although many private companies can find ways to reach a consensus on important issues without putting their company at risk, it seems to be more challenging for Congress to achieve that goal. No matter what your thoughts are regarding this issue, we hope that you now find yourself better informed about the specifics of the government shutdown.
Wishing for a quick resolution!
~Savvy Student
The general consensus about this government shutdown seems to be that there will be no drastic effect on the economy. However, the effect on the debt ceiling could be catastrophic: "The government could run out of money to pay its bills as soon as the middle of this month if Congress fails to raise the borrowing limit" (The Washington Post). If this were to happen, it could result in a permanent increase in the nation's borrowing costs.
While the general consensus may be that there will be no drastic effect on the economy, there is still a definite effect! Many types of businesses that rely on federal works may not be able to make up the revenue lost during this government shutdown. Additionally, sources of revenue like tourism will undoubtedly take a hit with national museums and parks closed until the end of the shutdown.
If you're a person who is more into figures and numbers, Savvy Student has an image from the Wall Street Journal that may put a few of the financial implications of this shutdown into perspective for you. The image below demonstrates some of the anticipated financial hits that will be taken by some of the biggest names in the country, such as Wells-Fargo and IHS Global Insight.
Wishing for a quick resolution!
~Savvy Student
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