US shutdown sends economy to unknown waters

Within two weeks, the closure will cost more than the boundary wall that President Donald Trump demands

Within two weeks, the closure will cost more than the boundary wall that President Donald Trump demands

The American government's closure on Saturday became the longest in history and takes a growing bite every day from the world's largest economy, economists say.

Although most of the 21 "counterfeits" in public spending since 1976 were hardly a scratch on economic growth, the length of this shutdown makes it more difficult to say how bad the impact might be.

"It is not a difficult period to say that it is initially smaller and then expands, the pain begins to widen," said Beth Ann Bovino, American economist at S & P Global Ratings, told AFP. "Think of it as a butterfly effect."

With about a quarter of the federal workforce being affected, the shutdown currently squeezes an estimated $ 1.2 billion a week from the economy, Bovino said, but that figure could grow if it drags.

At the current rate, it will have cost America within two weeks, more than the $ 5.7 billion demanded by US President Donald Trump for a wall on the border with Mexico, the dispute with Congress that led to the failure to financing for government operations.

After prolonged closures in 1995 and 2013, the US economy continued to grow while the equity markets were mainly sideways.

The Securities and Exchange Commission has blocked inventory management

The Securities and Exchange Commission has blocked inventory management

The Securities and Exchange Commission has blocked inventory management

And GDP growth that has been lost in one quarter can recover in the next quarter, while the government comes back to life and employees recoup their lost salaries. But some losses can never be recovered.

In countless but often invisible ways, the federal budget of $ 4 trillion is felt in the daily lives of all Americans, well above 800,000 government workers who now work without payment – many of them missed their first salary on Friday.

Even switching off part of the government means that the life force starts to bleed quickly.

Payments to farmers and poor families, craft beer labels, food inspections and economic data have all fallen victim to the budget impasse.

Meanwhile, tax refunds and payouts of borrower income were crucial for the mortgage industry with billions on the line.

"The tentacles hit many pathways and that is very sad," said Bovino.

American Coast Guard cutters, their plows that work without paying, started Monday breaking up in commercial harbors in the icy waters of the Great Lakes near the Canadian border so that local steel factories can be supplied with iron ore.

Meanwhile, farmers can not collect aid payments intended to alleviate the pain caused by the Trump trade war with China.

– Hurt the poorest –

Delays are reportedly affecting some federally-backed mortgage applications - food on the housing market

Delays are reportedly affecting some federally-backed mortgage applications - food on the housing market

Delays are reportedly affecting some federally-backed mortgage applications – food on the housing market

Small Business Administration loans to help mother-and-pop companies try to invest, hire and grow are delayed.

There are no government loans for seeds or cattle feed and none of the regular data from the agricultural department about crop yields and commodity prices that farmers depend on to plan for the coming year.

Permits for certain oil and gas drilling – which contribute to GDP calculations – have been delayed.

Bloomberg estimates that government contractors are losing $ 200 million per day, reducing income for giants of the defense industry such as Boeing, General Dynamics and Leidos.

Tourism in the country's 400 national parks normally generates $ 18 million per day, but with a number of unsupervised parks and many services stopped, local restaurants, hotels and shops lose customers.

Government support to feed the poorest Americans will only be financed next month.

None of this includes the hardships of the 380,000 federal workers who have been laid off or the 420,000 who, as & # 39; essential & # 39; be considered but work without paying.

They are estimated to owe $ 438 million a month in rent and mortgage payments, according to real estate firm Zillow.

Around the Washington region, where about 20 percent of the federal workforce lives, restaurants are empty, taxis are inactive, and traffic is moving more and more with creepy ease along the capital's chugged boulevards.

Yingrui Huang, an engineer for a defense contractor at NASA & # 39; s Goddard Space Flight Center in Maryland, told AFP that his company is normally at work building weather satellites and telescopes for the government, but is being blinded until further notice .

To counteract boredom, he now drives the Lyft mobile service, but he said he was most concerned about employees on the hour, such as concierges, cafeteria staff and secretaries.

"Their salaries are certainly lower than those of the technical staff, they are not in the spotlight, we do not think about them," he said.

Government support to feed the poorest Americans will only be financed next month

Government support to feed the poorest Americans will only be financed next month

Government support to feed the poorest Americans will only be financed next month

Economic research into the last major shutdown in October 2013 showed that many federal employees could largely avoid being in debt – delaying mortgage payments and varying balances between credit cards.

But that shutdown lasted barely two weeks – one payment cycle – and lawmakers had then quickly promised that employees would receive back-pay.

"It is possible that the effects will be greater for this shutdown," the economist at the University of Chicago, Constantine Yannelis, who studied the shutdown in 2013, told AFP.

"The longer a shutdown lasts, the more tenacious a change in habits that you might see."

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