S&P: Government Shutdown Costs the US $1.2B in GDP Every Week

via financialpost:

The U.S. economy will take a billion-dollar hit if the government shutdown continues until the weekend, experts have predicted as Donald Trump showed no sign of backing down.

Some 25 per cent of the federal government is without funding after the U.S. Congress and the president failed to approve a new spending package.

Standard & Poor’s, the credit rating firm, estimated the shutdown would shave US$1.2 billion off America’s gross domestic product [GDP] every week.

The shutdown began at midnight on Friday and shows little sign of ending as the one-week mark approaches. The departments of Homeland Security, Justice and Transportation are among those impacted.

Some 800,000 government workers are affected. While some of them continue to work, many will not get paid until the shutdown ends, impacting cash flows for scores of Americans.

Some have taken to social media to post about how it is affecting them with the hashtag “#shutdownstories”, including voicing concerns over substantial bills that soon need paying.

At the heart of the shutdown, which sees affected government agencies and departments close their doors, is Donald Trump’s insistence on new funding for his U.S.-Mexico border wall.

Trump has said that he will not approve any new spending bill, which first needs to be agreed by the US Congress, unless it includes US$5 billion of border wall spending.

With the Democrats fiercely against the move and soon to take over the House of Representatives, a deal looks tricky. Trump doubled down on his demand on Christmas Day when asked when government would fully reopen.

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