Will GDP grow zero in the first quarter of government closure? White House Adviser: Possible

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 Will GDP grow zero in the first quarter of government closure? White House Adviser: Possible


Trump and the Democrats continued to fight the law, and the governments partial closure problem is far from being solved. The Acting Chief of Staff of the White House is asking heads of agencies to provide a list of the impact of the closure that lasts until March. Analysts believe that the White House is ready for a long-term closure of the government.

On January 23, Kevin Hassett, chairman of the White House Economic Advisory Board, said that if the government shuts down for a long time, the U.S. economy could grow zero in the first quarter.

In an interview with CNN on the same day, Hassett said that he was not overly concerned about the long-term impact of the closure of the government. But when asked by reporters whether there will be zero GDP growth in the United States this quarter, Hassett admitted that this is possible.

Although zero growth is possible, Hassett remains optimistic. He believes that the economy is usually weak in the first quarter, and once the government reopens, the economy will rebound and the hit GDP will eventually recover. Hassett also said growth would rebound sharply in the second quarter if the shutdown ended in the first quarter.

Despite many economistspredictions that the U.S. economy will decline next year, Hassett said the U.S. economy still looks strong. He said the likelihood of a recession in 2020 was close to zero, and continued strong employment growth was a healthy sign of the U.S. economy.

In the face of external concerns about the government closure and the global economic slowdown, Hassett still adheres to this years economic growth forecast of 3%.

Earlier than Hassett, White House National Economic Committee Director Kudrow also said on the 22nd that the closure of the government has not had a negative impact on the basic economy at all. It is expected that the closure will affect GDP growth, but the impact is only temporary, and the economy will rebound rapidly after the closure.

Unlike the optimism of White House officials such as Hassett and Kudrow, business and economic circles have shown clear concerns about the closure of the government.

The Business Roundtable, a group of CEOs of many large American companies, said in a statement on the 23rd that the closure of the government is hurting the U.S. economy and American workers and hindering policymakers from focusing on creating strong and sustained economic growth solutions for the United States.

Earlier this month, ratings agencies also warned that the U.S. economy would lose $3.6 billion as of 11 due to a partial government shutdown, and that if the shutdown lasted until this weekend, the loss would reach $6 billion, exceeding Trumps $5.7 billion wall-building cost to Congress.

Last month, 22, the deadlock over the government budget triggered by the border wall failed to break through in Congress, and the U.S. government fell into an indefinite partial standstill state. At present, the suspension has lasted 33 days, the longest record in history.

Nine departments, including the U.S. Department of Justice, the Department of Homeland Security, the State Department, the Department of Transportation, the Treasury and the Department of Agriculture, were affected, and 800,000 federal employees were forced to take vacations or work without pay. There are already many employees who are reluctant to continue unpaid work, and their unions are suing the government.

During the closure period, the attitude of the Democrats towards the Trump border wall remained unchanged, and Trump refused to make major concessions. Last weekend, Trump was willing to compromise and use immigration protection in exchange for the cost of building the wall, but the Democrats did not buy it.

In addition, in order to solve the problem of closure, the Senate will also vote on the Republican and Democratic proposals for funding the government by February 8. Both proposals are expected to be difficult to pass because of the stalemate between the two parties over Trumps $5.7 billion border wall fund.

The Washington Post said Wednesday that the White House was ready to close for a long time.

The newspaper quoted an anonymous source as saying that Mick Mulvaney, acting White House chief of staff, had urged heads of agencies to provide him with a list of projects most affected by the closure of the government until March and April.

The person familiar with the matter said that Mulvani hoped that the list would be submitted by 25 days ago, which is the most conclusive evidence so far that the White House is preparing for a long-term suspension of the government.

Source: Observer Network Responsible Editor: Li Wan_B11284