US Government Shuts Down After Inability to Form a Financial Plan

At 12:01 a.m. Eastern Time in Washington D.C., on the First of October, 2013, the government of the United States of America temporarily shut down until a financial budget and plan can be put into place. The government shut down will likely hurt the U.S. economy as well as all of its trading partners, decrease the value of the U.S. dollar, and increase U.S. national debt.

This is important to look at from a business perspective for a couple reasons, the first being it is likely to negatively impact a tremendous amount of businesses, but also, it highlights the importance of a sound business plan.

Without a solid business plan, it is incredibly hard to understand expected costs and revenue, which makes creating a functioning budget virtually impossible. This can be very dangerous because it can lead to overspending or under-spending and missing out on potential business opportunities. In the case of the U.S. government, the lack of a financial plan was deemed so dangerous that salaries were halted for the majority of government employees until a budget can be determined.

Many of the risks for businesses can be seen with the  U.S. government case if properly put into perspective. The value of the dollar can be seen as the value of a stock, these would fall as people realize the risk in investing into an organization without a functional business plan. Countries that trade with the U.S. can be viewed as key partners, trade will likely reduce if a plan is not chosen soon since the U.S. will have a more limited amount of spending money. Finally, the increase in national debt would correlate to the drop in productivity of the company which would in turn decrease revenue and profit.

Stable business plans are the back bones of flourishing organizations, and unless a plan can be agreed upon soon in Washington, the United States may have a fairly bumpy road ahead of them.

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