US Government Shutdown To Threaten The Economy
By MYBRANDBOOK
The continued US government’s shutdown for more than 23 days, which is one of the longest ever, will have a bigger impact on the economy if it continues to the past February month, this will hit business and consumer confidence.
So far, there appears to be no end in sight with President Donald Trump locked in a stalemate with Democrats over his demand for funding for a border wall.This has arisen with the fight between President Donald Trump and Democrats over his demand for a border wall could end up complicating the government's handling of the debt ceiling, which becomes an issue March 1 and would have the biggest impact on the economy if not resolved.
The shutdown affects more than 800,000 federal workers in nine different departments, as well as several federal agencies. This includes the departments of Agriculture, Commerce, Justice, Homeland Security, Housing and Urban Development, Interior, State, Transportation and Treasury.
The shutdown began after Trump and Democrats failed to come to an agreement on whether to allocate funds to a wall on the US southern border with Mexico and stem irregular immigration. The president requested $5.7bn be added to new federal spending legislation that needed to be passed before the previous spending expired on December 21.
Bank of America Merrill Lynch economists cut their forecast for fourth-quarter growth to 2.8 percent, down 0.1 percentage point, and said they may have to trim their first-quarter estimate of 2.2 percent even more if the shutdown continues.
The New York Times reported that as of this coming Saturday, the government shutdown would be the longest gap in federal funding in the past 43 years, surpassing a 21-day shutdown during the Clinton administration in 1995. The newspaper noted that before 1981, agencies were able to operate even in a funding lapse by cutting out nonessential operations.
The cause of making boundary, worried Trump is over thousands of Central Americans who fled their home countries in hopes of applying for asylum in the United States. Trump's demand for a border wall funding comes in addition to several other measures aimed at restricting asylum seekers and immigration under the administration's "zero tolerance" policy.
The good part on US and the statistics shows, The US economy’s GDP is about $19,000bn, the overall hit is small in relation to the total. But the costs are cumulative so ironically in another couple of weeks the costs will be greater than the $5.7bn that the administration is seeking for the wall on the Mexican border.
The longer the shutdown lasts, it’ll strain liquidity for defense services contractors and certain municipal bond issuers that rely on federal funding. The President Trump is edging closer to declaring a national emergency to pay for his long-promised U.S.-Mexico border wall as pressure mounts to end the three-week impasse that has closed parts of the government and deprived hundreds of thousands of workers of their salaries.
The shutdown has started since Dec. 22 . A number of lawmakers have said they'll donate their salary to a worthy cause as long as workers remain without the paychecks . Today, 42 percent say they support a wall, up from 34 percent last January. A slight majority of Americans (54 percent) oppose the idea, down from 63 percent a year ago. However, 70 percent of Republicans say they strongly support the wall, an increase of 12 points since January 2018.
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