From Knoxnews:
"UT Experts: Government Shutdown Will Have Lasting Economic and Social Impacts"
Impacts from the federal government shutdown, which entered its 34th day on Thursday, are likely to extend far beyond the hundreds of thousands of federal workers struggling to make ends meet without paychecks, according to professors of economics and social work at the University of Tennessee. The ongoing shutdown is affecting approximately 800,000 federal workers, close to half of whom are working without pay, while the rest remain on unpaid furlough. The situation has prompted some employees to turn to yard sales and pawn shops. Dr. Marianne Wanamaker, who served as senior economist over labor and education on the President’s Council of Economic Advisers last year and is an assistant professor at UT’s Haslam School of Business, said conventional wisdom about federal shutdowns is that short shutdowns usually have few, if any, effects, but longer shutdowns can have extended economic ripples. “Long shutdowns are a completely different story, so the federal government will eventually reopen, and it will eventually pay all federal employees,” Wanamaker said. “So, there’s no loss there, but all the money those federal employees would have spent had they been employed but now are not spending during the shutdown, most of that will never be recovered.” The economic impact is also likely to be reflected in January’s unemployment rate, which the Bureau of Labor Statistics is set to report on Feb. 1. Wanamaker said the unemployment rate, which was at 3.9 percent in December, could potentially rise to between 4 and 4.1 percent when January’s report is released. That increase, combined with a lack of information from other government agencies that provide data on construction, retail sales, real estate and other sectors monitored by agencies that aren’t being fully funded through the shutdown, could likely impact decisions made by the Federal Reserve. What’s more, Wanamaker said, is that the information could wind up being heavily affected by the shutdown once it is collected, making it hard to decipher the shutdown’s impact from the natural status of the economy. "The Fed has said we’re flying blind because we don’t have this data,” Wanamaker said, “but I think the bigger problem is, even when you get the data, it’s not going to be clear how much of that is just reflecting shutdown and how much of that is going to be real deviations from the norm.” Dr. Stacia Martin-West, an assistant professor at UT’s College of Social Work, said the shutdown is likely to have a devastating effect, not only on the families of federal workers, some of whom may turn to high-interest loans in lieu of a paycheck, but also on families who depend on the federal government to help them secure food and housing. “What this really shows is a lack of financial security that really permeates the American household now,” she said. “Most people cannot come up with $400 even in the case of an emergency.” That impact, Martin-West said, is exacerbated by financial instability among federal workers and families that depend on SNAP benefits and Section 8 housing vouchers and can force families without significant savings into a trajectory of ever-increasing financial struggles. To make matters worse, while federal workers are entitled to back pay and have legal recourse to require payment for time worked during the shutdown, families who incur damages from losing food or housing assistance have no means to recoup their losses, Additionally, the federal court system, which has been funded by court fees and other agency funds during the shutdown, is facing an impending closure at the end of this month, according to a release from the Administrative Office of the U.S. Courts. As the shutdown continues, only emergency cases will be heard by the federal court system, according to Joan Heminway, the W. P. Toms Distinguished Professor of Law at UT’s College of Law. Because the court system collects fees independently, it can use those fees to remain open during the shutdown for as long as those funds last. Currently, the courts’ administrative office estimates its funding will end on Jan. 31. “There will have to be some courts available on emergency status, and I presume that they’ll just be paid,” Heminway said. “There must be a reserve emergency fund that the government sets up to continue to fund them as well. It’s pretty much a mess.” The shutdown has also forced temporary delays on small business loans and oversight agencies like the Securities and Exchanges Commission, which Heminway said can prevent businesses from securing credit from the government, making major private placement transactions. The effect could be chilling on entrepreneurs. “Depending on how long the shutdown goes on, it could be a ripple or it could be something bigger than a ripple. It could be a wave,” Heminway said. “It could be denying ourselves an interesting and creative enterprise of some kind, maybe forever, just because a person couldn’t get the right financing together at the right time when their availability or ability existed to bring those ideas to market.”
^ It's important for every American (politician or regular) to know and understand that this Government Shutdown will directly impact more than the 800,000 Government employees that aren't being paid. It is one thing to simply say that it's sad what all of these people who aren't being paid, not getting their benefits or suffering through cancelations and long lines and another to remember that each person affected is more than just a number or a political pawn being used by Trump, the Republicans and the Democrats they are real people who can not pay for food, for medicine, for childcare, for their rent, for their bills, etc. While most of the furloughed government employees will eventually get backpay once the Shutdown ends that does nothing to help them now or for all the government contractors that are loosing money. There is the ripple-down effect too. All the businesses where government workers spend their money, etc. are loosing and won't get any back-pay. I'm afraid more bad effects will happen before this Shutdown ends and it is all the fault of the President and members of Congress. ^
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