What does a potential US government shutdown mean?

The United States is moving towards Partial government shutdown This weekend before the siege in Congress For the demands of Republicans To cut radically public expenditure.

The new US fiscal year begins on October 1But the differences are profound the Republican PartyOr at the level of the federal debt, it prevented the adoption of the laws necessary for the survival of the government.

Rating agency Moody’s He warned this week that the closure would be a “credit negative” for the company US sovereign debt Which threatens its high status and increases the risk of high financing costs.

Here’s what will likely happen starting Sunday if the US government shuts down:

Hundreds of thousands of Federal employees He will be suspended without pay, for the time being Army personnel Other workers deemed essential will continue to work without pay.

the American Federation of Government Employees AFGE estimates that a complete lockdown would mean approximately that 1.8 million workers They will not be paid during this period.

While some 850 thousand non-essential workers It will be suspended, according to Committee for a Responsible Federal Budget.

Once Financing agreementThese restrictions will be lifted and all affected employees will be paid retroactively, according to AFGE.

Operations classified as essential will continue to operate.

However, many services, such as the new service, are likely to be affected Social Security applications And medical careFood inspection and National parks.

The longer the lockdown lasts, the greater the impact.

Economists from Goldman Sachs It is estimated that the closure will affect Economic growth In the fourth quarter by 0.2 percentage points for each week it continues.

The impasse could take between two and three weeks to resolve, experts emphasized in a recent note to their clients, “since neither side appears willing to make immediate concessions.”

“While some funding disruptions ended very quickly, the political environment leading up to the deadline closely resembles the situation before longer closures in the past,” they added.

Assuming the lockdown ends before the end of the year, Goldman expects growth to rebound early next year The same amount as it decreased in the fourth quarter, while researchers from Oxford Economics They expect to recover half of the loss.

The loss of production by government employees would cost annual economic growth about 0.1 percentage point per week, and would be irreversible, according to Oxford Economics.

The shutdown could also have a knock-on effect on the economy, as unpaid federal workers would begin to reduce their spending.

Economists fear the shutdown will also disrupt the federal government’s release of official data.

This is a real concern Federal Reserve of the United States, which said it would be guided by the data to determine its monetary policy. The Federal Reserve has recently slowed the pace of aggressive interest rate hikes to address persistent inflation.

Without new data, andcentral bank He will be forced to make decisions with serious consequences for the American economy without having a clear picture of the situation.

While a short shutdown will have limited impact in the long term, it could become a major issue if lawmakers don’t reach an agreement quickly.

(Information from Agence France-Presse)