Everybody has read or heard about it: The shutdown in the United States of America. The reason for the shutdown is because Congress didnt vote for the federal budget that the Trump administration made. Therefore, the government has to temporarily shut down. This means that many public servants are not getting paid. Also, many theme parks and museums have to shut down, because the government can not and may not spend any money.
The reason for the shutdown is the 5.7 billion dollars Trump wants to spend on the wall across the southernborder. This 5.7 million did not get the approval of Congress. Congress believes that the money is more wisely spend elsewehere. They would like to see the money being spend on other things such as more border control or invest more in ways and technology to counter drugs and illegal immigration.
The shutdown was 33 days long. From the 21st of December 2018 until the 25th of January 2019. Many people were affected by the shutdown. Not only public servants, but also airports, farmers and security had to deal with the effects of the shutdown. The consequences are severe. Economists believe that every week the shutdown happened economic growth was reduced with 0.13%. This means that stocks will decrease in value and investors will lose money. These are only the consequences during the shutdown, the consequences afterwards might be even bigger.
The wall by Donald Trump isn’t going to be built any time soon. This was one of his biggest policies he advocated during his campaign. If this does not work out, he might lose a lot of support from the public, because he didn’t keep his word. Consumers are also affected by the shutdown. Michael DePalma from PhaseCapital expects that the economy needs a long time in order te recover from the shutdown.
The employees that had to sit at home during the shutdown probably won’t be able to spend their first paycheck on groceries, but probably on repaying the debt they weren’t able to last month. The shutdown could also lower consumer confidence leading to less expenditure. That is why the economy needs time to recover from the shutdown.
The shutdown in the United States because of the inclusion of the wall in the budget had many consequences, mostly negative. Many employees were negatively affected by it, but also the consumer will be critical of the economy of the United States. For the actual numbers and facts we have to wait untill it is made known.
For now, the shutdown is over and regular life will continue.
By Merijn van der Leeuw