http://www.nytimes.com/2013/10/19/us/shutdown-to-cost-us-billions-analysts-say-while-eroding-confidence.html?_r=0
“Shutdown to Cost U.S. Billions, Analysts Say, While Eroding Confidence.”
Choosing to focus on the theme of business and economics in the news and failing to mention the most controversial aspect of today’s economy, the government shutdown and the raise of the debt ceiling, would be entirely unjust. Talking to students, many understand little more than the fact that the government has an unsolved quarrel where the blame is consistently shifted between President Obama and the republicans in Congress and aren’t aware of the impact this shutdown has on the general public.
The government shut down for a period of sixteen days, wrecking havoc and controversy throughout America. Every time you stepped on the train or spend some time at a coffee shop, at least one person standing beside you would raise their argument as to what they think of the shutdown, Obamacare, and our government in general. However, before picking sides, it’s important to understand why the government was shut down in the first place. According to the Constitution, the House of Representatives and the Senate are supposed to agree on appropriation bills that state how much funding will be given to certain federal agencies and where limits on spending will be set. However, when Congress cannot reach an agreement on how to allocate funds, most functions of the government, like permit offices and funding agencies, are thwarted. The ongoing disagreement on certain policies of the Affordable Care Act was the major reason for this shutdown and the refusal to negotiate had created doubt and chaos. While republicans fight to delay, repeal and do essentially everything they can to stop Obamacare from happening, it seems inevitable. This debate of how to break up funds without increasing our country’s debt has been longstanding but the shutdown itself seemed counterproductive as it “cost the United States economy several billion dollars”, adding to our already $17 trillion national debt.
While services like Social Security and military pay continued, 800,000 federal government workers were barred from doing their jobs and thousands weren’t paid for this unexpected break. Now that the government is back on its feet, many of these workers will have to work overtime to compensate for all the work that has piled up over the past three weeks. It will take quite some time for the Obama administration to deal with the consequences of this shutdown. The government hasn’t had such a shutdown in 1996 and in comparison to the combined cost of “about $2.2 billion in today’s dollars” this years “government shutdown will cost the economy $3.1 billion in GDP from lost government services.”
Aside from the Monday lost on a large scall, private sectors and business like the fishing industry lost significant profits as well. During this three week period, fishing permits weren’t issued, passports were left unprocessed, mortgage loans were ignored, parks and museums lost $450,000 a day, tax forms were not filed and the list goes on. Economists say “the indirect costs of the most recent shutdown will be much bigger than the direct cots to the taxpayer”. Now that the shutdown is over, the thousands of employees that were furloughed, or placed on temporary leave, are coming back to their offices while some are still waiting to hear whether they can resume work. Many will not receive back pay for the days they missed which causes new controversy as family bills must be paid and life continues on.
This government shutdown revealed how difficult it is to come to agreements and how intricate and significant each move the government makes is. Even though support and confidence for government administrations has wavered, over time problems will be solved and we can only wait to see how. However, being students in what is often labeled as a business school and having access to this breadth of knowledge about business, economy and politics, we can become active participants in society and learn how we can make our own positive contributions on a small scale. Perhaps in the future, we can have a greater voice and involvement that would assure such a shutdown doesn’t occur again and that our job prospects and the jobs of others aren’t put at risk.
