Government Down: Yay or Nay?
According to a blog in the Washington Post, new research shows that the effect on the GDP from the shutdown of the US government will not be as devastating as analysts have previously predicted. The Defense Department has forced resumed many critical positions in the government deemed “essential employees” so the government has not completely stopped running.
From a political standpoint, I really don’t understand how shutting down the government resolves anything, because honestly, the stalemate wouldn’t be solved. From the financial point of view, it also seems to be damaging the economic state of the United States. National parks and various other government services have been temporarily discontinued and the government is even considering increasing its debt limit for a short period to accommodate for the shutdown (source). This could be extremely hazardous to the country because it could lead to a default on the debt. A Treasury report states that “Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world” (source).
The shutdown could potentially cause quite a significant amount of damage, but I guess they haven’t figured out a better way to solve the disagreement…