The United States would pay dearly for a government shutdown. As a result, thousands of federal employees have been plunged into unexpected financial hardship. The Trump administration has worked in a quick and decisive manner to reduce the economic blow. They’ve made sure military personnel continue to get paid and that critical food assistance programs never lapse. The risk of grave economic harm hangs in the balance. With each passing day, workers are beginning to miss paychecks, and the administration is now threatening national, unprecedented actions like denying back pay and permanent firings.
As the shutdown wears on, it has started to take a toll on the short- and long-term lives of the many federal employees. Michael Galletly is a marketing specialist for the Utah Department of Agriculture. With no incoming paychecks, he has begun the process of applying for unemployment insurance as well. He’s contacted his mortgage lender and car loan company looking for relief.
I might be able to stretch it to two months, three at very, very best on a shoestring budget,” Galletly said. I don’t really have any sense of how long this thing might last.
The cascading impacts of the shutdown go far beyond the federal employees themselves. Millions of families are recalibrating their household budgets, spending less at the grocery store and elsewhere, and in some cases even canceling travel. Allison, whose husband is employed by the Defense Department in Ohio, shared her fears about the continued crisis.
So while the impact of a short shutdown should be minimal, a protracted government shutdown is just another chance we’re taking that could derail the trend of steady growth we’ve been on the last couple of years, she stated.
Now, the cost of the shutdown is starting to be seen. Analysts very roughly estimate that the cut will reduce quarterly growth by around 0.2 percentage points per week. This decrease represents approximately $15 billion in missed economic activity. Most economists predict the net economic effect will be short-lived and rather modest. This evaluation, of course, depends on just how long the shutdown lasts.
Now, a cloud of uncertainty hangs over the initiative as major releases of economic data — including the monthly jobs report — have been pushed back or put on hold. Without this essential information, policymakers are surely making mistakes. Meanwhile, businesses and investment firms are increasingly beginning to hit the brakes on their spending plans.
The Trump administration’s method of controlling the shutdown has caught the interests. Military families receive their regular paychecks on time, and children don’t lose access to nutritious food. Yet the potential for delaying back pay for furloughed workers adds a troubling wrinkle to this story. Further, countless employees are worried that organization-wide extended interruptions could be damaging enough to require irreversible loss of staff.
Michael Galletly’s outlook reflects a broader concern shared by many federal workers: “A lot of people tend to look at these things and just hope for the best,” he remarked. “Having been through this before – this is my third government shutdown as a federal employee – I just can’t afford to do that.”