How does the shutdown affect the economy ?
by shubhankarrustagi
In October the US government announced its shutdown, the first time in 17 years. The question that arises from this is that how does this shutdown affect the USA’s and the worlds businesses and economy ?
We have seen the immediate affect of the shutdown in many government related organisations across the USA like Lockheed Martin, who had to put 3000 employees on unpaid leave in leu of the shutdown. This shutdown will also affect the US economy as many important organisations which rely on the government to collate imformation on the economy, the US government are a large source for economic data for many large multinationals and other american companies. This shutdown has impeded the slow growth in employment after the economic crisis and if the shutdown were to go on would only lead to more layoffs and maybe shutdown in companies like lockheed that earn a large part of their revenue from deals with the US government.
If this shutdown were to last longer it could have adverse effects on the global economy as the rising unemployment would lead to a drop in demands for imports and thus hurt many economies around the world. Due to the importance of the USA in international markets a prolonged period of the shutdown could also lead to a drastic drop in the value of the dollar as the markets around the USA all begin to collapse.
Website used,
http://www.theguardian.com/world/2013/oct/05/us-shutdown-what-will-happen-who-affect