Recently the US government has shutdown as the politicians on Capitol Hill have failed to agree a new budget for the 2013-2014 financial year. This shutdown has gradually hit businesses bot inside and outside of America.

In terms of employment, the shutdown could put thousands of workers on unpaid leave, without knowing how long this will last. By all means, if people are getting unpaid, the consequence would be reduced consumer spending. And some of them may simply fail to meet their essential financial need eventually. As a result or the businesses, they will make less profits or even make losses. There will be less investment spending and firms that make losses may eventually shutdown their businesses.

By placing the scope on the entire US nation, the shutdown of the federal government can hit its GDP with significant figures. And the longer the government shuts down, the greater loss of GDP will be caused.

Another major issue that is linked to the shutdown is the debt ceiling battle. America is predicted to reach its borrowing ($16.7tn dollars) around mid-October. If America reaches the limit, meaning it would default on its debts.

Work cited:

http://www.bbc.co.uk/news/business-24419564