Due to the lack of substantial progress in the negotiations between Trump and the Democratic Party on the construction of the border wall, the ongoing partial closure of the U.S. government at 1300 Beijing time today (12th) has broken through 21 days and entered the 22nd day, surpassing the closure of the Bill Clinton administration in the mid-1990s and setting a new record of the longest suspension of the U.S. government.
This record not only makes nearly a million federal employees in the United States complain for days, but also shuts down many government agencies in the United States. Even the trash bin in Washington National Square has not been cleaned.
21 days have cost $3.6 billion
From December 1995 to January 1996, the conflict between then President Bill Clinton and the Republican Congress closed the U.S. government for 21 days. At that time, the government shut down and Bill Clinton submitted a seven-year balanced budget plan to the Congressional Budget Office.
CNN reports that, to make matters worse for nearly a million U.S. federal employees, there are no meetings between White House officials and congressional staff in the next few days, and Trump is not expected to appear. That is to say, the longest shutdown record of the U.S. government in history will continue.
CNN also quoted a White House official as saying that if lawmakers fail to reach an agreement, the White House will look for a possible plan to allow Trump to fund its border wall construction, one of which is to use funds confiscated from citizensassets.
On Friday, fearing a record government shutdown, U.S. stocks ended five consecutive gains and oil prices fell by 2%. On Friday, the Dow closed down 0.02%, the Nasdaq closed down 0.21%, and the S&P 500 closed down 0.01%.
According to previous estimates, the U.S. economy will lose $3.6 billion by Jan. 11 due to the partial closure of the government. In addition, if the closure lasts two weeks, the loss will reach $6 billion, exceeding the $5.7 billion required by Trump to build the wall. In other words, from December 22 last year to January 11 this year, the U.S. governments current round of lockouts caused an average daily loss of about $170 million to the U.S. economy.
Photo Source: CNN
Reporters from the Daily Economic News (Nbdnews) noted that since 1976, the federal government has experienced more than 20 shutdowns. The fundamental reason for each suspension is that Congress and the President disagree on policy, threatening the government budget. The government shutdown, which began before Christmas in the West, is the 21st since the modern budget process was introduced in the United States in 1974.
According to Business Insider, on average, the previous 20 U.S. government shutdowns lasted for 8 days, and each government shutdown lasted relatively long in the past 30 years. Six government shutdowns since 1990 lasted an average of 9 days.
Analyst: Closing every week
Quarterly economic growth declined by 0.1% to 0.2%.
Analysts said that for the moment, the US governments closure still has a small impact on the US economy, but if the governments closure continues to hit business or consumer confidence, it may have a greater negative impact on the US economy. Bank of America Merrill Lynch analysts have cut their U.S. economic growth forecast for the fourth quarter of 2018 by 0.1 percentage point to 2.8%, saying that if the government closes down, they may further reduce the quarters economic growth to 2.2%, while JPMorgan Chase economists have cut their U.S. economic growth forecast for the first quarter of this year by 0.25 basis points to 2%.
Economists at both investment banks say that if the U.S. government shuts down and continues, it will cause a temporary 0.1-0.2 percentage point decline in the U.S. economy every week. In addition to the direct drag on government expenditure, the temporary slowdown in consumption due to the weakening of workersexpenditure on vacation and the delay in investment due to policy uncertainty may have indirect effects. Bank of America economists wrote in a research paper.
Source: As reported in the Wall Street Journal
The New York Times also reported that if the government closes down until March, the funding gap in food stamps may have a significant impact on personal consumption, and the cumulative drag of government closures may significantly reduce economic growth in the first quarter, although some of these effects will be compensated by the governments resumption and release of wages in arrears.
UBS said history shows that past U.S. government closures had little negative impact on the stock market. When the U.S. government shut down, the market was mostly positive. Since 1980, the U.S. government has closed 14 times, but S&P 500 has achieved positive returns for most of the time, with an average return of 0.4%.
Museum closed, garbage left uncleaned
You cant get a marriage certificate...
According to the Washington Post, about 800,000 of the 2.1 million federal employees in the United States are affected by closing down.
CNBC reports further pointed out that 420,000 of the 800,000 employees affected were deemed to be in necessary positions and need to continue working without pay, while another 380,000 unnecessary personnel left temporarily during the governments suspension. These employees were laid off in the Ministry of Commerce, the Ministry of Transport, the Ministry of Housing and Urban Development, as well as the Forestry Bureau, the National Park Administration, the State Tax Bureau and other units.
CNN reports that 800,000 federal employees are not paid
In addition, due to the governments suspension, the FDA has not conducted some routine food safety inspections and may run out of funds to review new drugs; the Securities and Exchange Commission (SEC) has been unable to perform its functions, such as companies submitting IPO applications such as UOB and Lyft, which have been delayed in receiving feedback from the SEC; and Alaska has been unable to obtain federal government permission and inspection. Some fishing boats have been stranded on the dock for several days; the Commodity Futures Trading Commission (CFTC) has stopped issuing weekly routine reports; thousands of federal employees are working without pay...
Many peoples daily lives are also affected. On social platforms, daily economic journalists note that U.S. government workers are anxious to get back to work.
Because of the vacation and the huge financial pressures faced by the moonlight clan with few deposits, many federal government employees expressed concern in the social media that they could not regularly pay for housing loans, student loans and other expenditures.
The Washington Post said in a previous survey of 1,500 federal employees that their next salaries were not guaranteed and that 85% of employees had cut spending during the Western Christmas season last year.
I want to help the American public understand the impact of government closures on federal employees in the United States. Thats all I have in my name. I have to pay my bills.
Senator Rosen consoled federal employees who were not paid because of the governments suspension.
The trash cans near Washington National Square were empty and piled up.
Dozens of government websites, including the U.S. Department of Justice, the Court of Appeal and NASAs official website, have been shown to be unsafe or inaccessible.
The museum was closed because of the closure of the government.
The Smithsonian National Zoo in Washington was closed.
Photo Source: Interception of Self-Defense Report
Because employees of the Marriage Registry in Washington, D.C., have been on leave, new couples may not even be able to get a marriage license for the time being.
Transportation Safety Administration (TSA) staff work without pay, resulting in long queues at many airports in the United States.
Another big worry: Americas debt has reached $22 trillion!
But its not just government closures that worry Americans. According to the latest data released by the U.S. Treasury Department, by the end of 2018, the debt of the United States was as high as $21.974 trillion. Bonner & Partners, an American research institute, predicted that the ratio of nearly $22 trillion in debt to the GDP of the United States had reached 111%.
In addition, the annual deficit in the United States has reached a sustained high of more than $1 trillion, which many economists warn could cause trouble for future generations. Reporters from the Daily Economic News (Nbdnews) noted that although the annual deficit had exceeded $1 trillion before, it had never happened in the current situation (sustained economic growth). People were worried that the consequences would be unimaginable in the event of a recession.
Fitch, a credit rating agency, warned Wednesday that it would downgrade its AAA sovereign debt rating later this year if the U.S. governments suspension caused it to hit the debt ceiling and affect budget formulation. Moodys said the government shutdown also had a negative impact on US sovereign debt, but did not constitute a credit rating risk.
Bonner & Partners reported last month that U.S. debt jumped from $16.1 trillion in 2012 to $17.8 trillion in 2014, up 11% in two years. The report predicts that U.S. debt will increase from $2.2 trillion in 2017 to $22.7 trillion by the end of 2019, a 12% increase in two years.
US debt is soaring (Photo Source: Bonner & Partners)
In 2012, U.S. debt was equivalent to 99% of U.S. GDP. Today, Bonner & Partners estimates that by 2018 the figure was about 111%. This means that government debt will exceed the value of all goods and services produced in 2018. By 2023, the U.S. debt is expected to reach $27 trillion, 38% more than the amount of money Lamp has owed since taking office in January 2017.
Economists say the dispute between Trump and Democrats over the construction of the border wall may complicate the U.S. governments handling of the debt ceiling. If the debt ceiling problem is not resolved by March 1 this year, it will have a huge impact on the U.S. economy.