10 Things You Need to Know About a Government Shutdown
While the current shutdown of the United States Government is certainly not the first one, Social Media has brought it to the forefront of everyone’s mind. Log in to Facebook and you’ll find countless posts and links to articles about who is responsible for what and the possible ramifications. It’s easy enough to share the links you agree with and ignore or argue about those that go against your side. As the popular television commercial sarcastically states- “If it’s on the internet, it must be true.” Putting all politics aside, here are 10 things to know about the government shutdown.
1. The government shutdown means that lawmakers have not reached an agreement concerning funding for government.
This does not mean that the government has run out of money; it simply means that the elected officials have not decided how to spend money that the government has. It has happened many times before now but has not been as noticeable in the past.
2. The government shutdown will impact Washington, D.C. more than other cities.
Since our nation’s capitol is filled with federal employees, D.C. notices the shutdown more directly. Any business that supports federal employees- daycare facilities, restaurants, and many other services- will not be utilized at the same level prior to the shutdown. Food establishments normally slammed during the lunch hour might find themselves looking more like a ghost town with federal employees not at work. In turn, those businesses would reduce the number of employees working (or cut hours for those that do work), which shrinks people’s paychecks. Disposable income quickly vanishes, which negatively impacts the economy.
3. The wait for government services lengthens.
People with loans pending from the SBA (Small Business Administration) will find indefinite wait times. Background checks for gun permits will not be processed due to a significantly reduced number of federal employees still allowed to conduct business. Passport approvals are halted, so cancel those plans you had scheduled a getaway to Europe for a romantic getaway.
4. National parks are now closed to the public.
Federal funds provide paychecks for park rangers and security required to maintain order and normalcy in our national parks. Without proper supervision to ensure safety, the Grand Canyon and the Smoky Mountains have been closed because funding for the parks has been halted. Check ahead before you pack your tent and load up the family for that wilderness excursion you’ve planned for so long; the great outdoors may not be open.
5. The Center for Disease Control is operating with a skeletal crew.
As flu season begins and the weather begins to get colder, we find ourselves one outbreak away from a potentially disastrous epidemic. The CDC is unable to maintain their annual flu program. They have shipped vaccinations but are unable to thoroughly monitor the spread of diseases and viruses to prevent unnecessary illness. Vaccinated employees should be able to weather the season, but those who become affected by contagious illnesses could significantly impact the workforce and cause another ripple in an already shaky economic situation.
6. Buying a house may be hindered.
Many people need to have their income verified for the purchase of a new home. The Federal Housing Authority is not operating with a full staff and will not be making much progress approving loans. Of course if you are selling a house, you may feel the impact since potential buyers cannot get loans approved. At least you have more time to pack, right?
7. Government-funded childcare isn’t being funded.
If you have relied on government funds to pay for childcare to enable you to attend school or to work, you may now have to make alternate plans for your children. If no one is able to supervise your children, you can’t go to work. This has an impact on several different fronts. First, an employee may lose a job or at least will not make as much money as they previously anticipated- which reduces disposable income and negatively impacts other businesses down the line. Second, the place of employment for that individual finds itself short a worker, which makes the business less efficient and less profitable, unable to provide the same level of service customers expected before the shutdown. The business suffers in both the short- and long-term.
8. People who need jobs may not be able to work, even if work is available.
Employers striving to follow all laws concerning the hiring of workers only if they are legally allowed to work in the United States are at a loss. The E-Verify service operated by the Department of Naturalization and Immigration is not currently in operation. Without this service, many workers cannot prove a legal right to work and are, therefore, unable to work. Businesses that could be hiring people, making a positive difference in the economy, are unable to do so.
9. Mutual funds and your 401K may take a hit if the Shutdown continues.
Investing in the stock market is a long term process, not typically a get-rich-quick experience. The market will more than likely react negatively to a continued shutdown, however the reality is that the stocks you own should recover given time and you may never feel the impact. The only way to definitely lose is to sell your stocks low out of panic. Hang in there as long as you can, and things should stabilize.
10. Fewer people working will naturally lead to less money being spent.
This has already been referenced, but it definitely bears repeating. When people don’t have jobs or as much money as they had before, they spend differently. Habits, like ice cream at Dairy Queen, will change. Over time those businesses that offer services people can (and have to) live without will eventually have to make cutbacks to hours scheduled or numbers of employees on the payroll. Those cuts will make the ripple continue to affect other businesses.
While you may not be a Federal Employee stressing about when you will get to return to work, and you may believe you are safe since you don’t live anywhere near D.C., the shutdown may disrupt your life in ways you never would have foreseen.
We at Perdue Vision strive to help our clients. By keeping you up-to-date in an ever-changing world, we want to provide you with vital information you can use to make informed decisions for your business. Your ability to thrive in this crazy economy is essential for your survival. After all “The success of your business or event is our business!”
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