Placeholder canvas
10 C
London
Thursday, February 22, 2024
HomeBusinessImplications for the economy as the US government faces imminent shutdown |...

Implications for the economy as the US government faces imminent shutdown | Economy Update.

Date:

Related stories

Joe Biden’s dog Commander bites Secret Service agents at least 24 times.

President Joe Biden's dog, Commander, was involved in at...

The dangers of realistic AI video creation: a warning in 13 words

A new artificial intelligence program called Sora, created by...

Answering Child Tax Credit Questions in Dallas-Fort Worth – NBC 5.

Congress is considering changes to the tax law that...

Nikkei in Japan Reaches New High, Exceeding Peak from 1989.

The Japanese stock market has been experiencing a surge...

Alabama hospital suspends IVF after court ruling on frozen embryos.

The Alabama Supreme Court recently issued a ruling that...
spot_img

Republican infighting has resulted in the failure of a stopgap measure in the US House of Representatives, which was intended to prevent a government shutdown on September 30. With hardline Republicans refusing to pass any legislation without drastic cuts to discretionary funding, the country now faces the possibility of a shutdown of all non-essential federal functions. Even essential functions won’t receive full pay until the shutdown is over. This political partisanship has elevated tensions and led to a potential crisis in government funding.

Without government funds, federal workers may go without pay, and citizens may lose access to programs such as nutrition assistance. The shutdown could also have a negative impact on the overall US economy, potentially worsening the country’s credit rating and driving up interest rates for government loans. Economists predict that a two- to four-week shutdown could result in a reduction of 0.1 to 0.4 percentage points in quarterly economic growth. The worst-case scenario of a full quarter shutdown could cause a 2 percentage point reduction in GDP growth. The shutdown would also have lasting effects on government contractors, small businesses, and the stock market.

Currently, the options to avoid a shutdown are limited. Congress must pass 12 appropriations bills to keep the government running, but it is unlikely to complete this process before the deadline. A stopgap measure could be used to temporarily fund the government while Congress continues to work on the appropriations bills, but hardline Republicans have rejected this option. House Democrats are looking to a potential bipartisan stopgap from the Senate, but it’s unclear if House Speaker Kevin McCarthy, a Republican, would introduce it on the House floor. The pressure on Republicans may lead to a shorter shutdown, but it also increases the risk of a more lengthy shutdown due to heightened intraparty tensions.

Source link

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

LEAVE A REPLY

Please enter your comment!
Please enter your name here