Government Shutdown Ruins Our Economy

Andreas Cantu
Mr. Roddy
IHSS
29 January 2019
Shutting Down and the Ripple Effect
The federal government shutdown cost the economy $11 billion, according to a new analysis from the nonpartisan Congressional Budget Office. Although most of the damage to the economy will be reversed as federal workers return to their jobs, the CBO estimated $3 billion in economic activity is permanently lost after a quarter of the government was closed for nearly 35 days. Overall, the CBO projected economic growth will slow this year to 2.3 percent, compared with the 3.1 percent rate last year, as the benefits of the new tax law begin to fade. So how is this related to economics.
 Economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth. We understand that 800,000 individuals were not receiving incomes. This impacted their ability to pay their monthly bills and make the normal monthly purchases of groceries and household goods. They might have chosen to tap into savings or to get a loan or use credit cards if available, but it clearly impacted the transfer of money in routine, daily transactions. This then had a ripple effect on retail stores in their community which did not receive a normal flow of business. Larger purchases were also put on hold. Due to the lack of income the people suffering from the shutdown financially could not afford to make these purchases. Retail businesses were then impacted in their ability to make purchases, at least not without accessing credit. This clearly impacted the businesses and their production of money. As I stated earlier while the government was shutdown the people suffering from it had no sort of income for roughly thirty days, this caused them to have to tap into their saving to pay for everyday essentials such as food. That part of the shutdown was focused on the consumption part of economics.







MLA Page
Mui, Ylan. “The Shutdown Cost the Economy $11 Billion – Including a Permanent $3 Billion Loss, Government Says.” CNBC, CNBC, 28 Jan. 2019, www.cnbc.com/2019/01/28/government-shutdown-cost-the-economy-11-billion-cbo.html.

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