Unless you’ve been hiding out in a remote cave somewhere over the past month, you’ve unarguably been exposed to news headlines, radio snippets, and television shows that discuss the ongoing partial shutdown of the United States government. Some 800,000 employees of the federal government have gone without pay for the past three weeks, being faced with either not showing up to work or working for free.
CNBC recently reported that a high-ranking official within the Trump administration shared that economic growth in the United States drops by roughly 0.1 percent for every week that the government is shut down.
You’re also likely familiar with the reason behind the government closure – President Donald Trump demands that some $5.7 billion of the federal budget be allocated to the construction of a border wall between the United States and Mexico.
Since the Democrats are in charge of the United States House of Representatives, they can effectively deny Trump’s request without him being able to take any recourse.
Standard & Poor, better known as S&P, crunched the numbers and estimated that the ongoing partial federal government closure is slowly draining the United States economy by some $1.2 billion per week that it persists. In terms of per-day hits, the U.S. economy takes a hit of about $170 million for every day that those 800,000-odd federal employees aren’t working.
Thus far, the government shutdown has cost the United States national economy some $4.3 billion, just $1.4 billion short of the $5.7 billion that President Donald Trump demands from the House of Representatives. The United States is losing all the way around when it comes to the government shutdown.
Some economists believe that the U.S. government shutdown could directly cause a full-blown recession
Nearly four weeks into the ongoing partial government shutdown, the current administration has set a record for how long the government has been out of commission. Since it hasn’t happened before, economists aren’t sure what to think.
According to Pantheon Macroeconomics’ Ian Shepherdson, assuming that the partial government shutdown persists until the close of the first quarter of 2019, the damage done to federal employees’ wages and contracts that the government maintains could effectively eliminate all growth that the national economy could have seen in the first quarter of 2019.
Even Jamie Dimon, the chief executive officer of financial services giant JPMorgan Chase, has spread Shepherdson’s analysis in an earnings call on Wednesday – let’s hope it doesn’t turn out to be true.