With government shutdowns typically lasting only a few days or a couple of weeks, this particular standoff between President Trump and Democrats have now landed us in the longest shutdown in history and economists have a loud and clear warning: the negative effects from the 800,000 federal employees and millions of federal contractors going without pay are becoming catastrophic.
Research is coming out in alarming numbers stating that the effects of this shutdown are quickly escalating past points previously predicted. JPMorgan CEO, Jamie Dimon, is just one of the many experts speaking out and he warns not only could US growth slow to zero during this shutdown but move into the negative.
Besides falling stock prices and a growing concern over the US-China trade war, the status of the US’s credit rating (which first took a hit during the 2013 government shutdown) is another worry. This all comes just ahead of a likely looming fight over the debt-ceiling.
Analysts at the S&P have warned,
“The longer this shutdown drags on, the more collateral damage the economy will suffer.”
The debt ceiling will need to be lifted by Congress sometime this summer in the event that the shutdown continues much longer or the US risks defaulting on some of its debt and that kind of event could mean significant fallout for not only the nationwide economy, but the worldwide level as well.