With the Federal government shutdown in the USA showing no sign of a resolution, lawmakers and financial experts are worried about the impact on economy and masses. The shutdown has crossed a week already and speculations are rife as the two political parties are still at loggerheads. In last week alone, the shutdown cost the US economy a whopping $1.6-billion. If the republicans and democrats do not agree to reach a consensus, the common man will be the worst hit, says economists and finance veterans. The impact will be spread beyond the citizen’s ability to visit Lady Liberty or closure of National Parks, caution the experts.
Impact on economic recovery pace
As a matter of fact, it is not only the government employees who are without pay or working on furlough those will get affected by the shutdown that shows no sign of retreat. The economic recovery that was supposed to be gathering steam prior to the initiation of this shutdown will lose momentum. The quarterly GDP will be reduced by .2 percentage points per week. If the shutdown persists for a month, the reduction will be even more drastic. The job market will be at the receiving end and uncertainty will loom large.
Effect on people who are not government workers
It may look like the government workers are the worst hit but on a finer analysis, the picture seems to be different. People, who are not in government workers, will not be hit financially in a direct manner. However, their tax refunds and mortgage refinance transactions will be badly hit buy this shutdown. Those who applied for six-month extension earlier this year will have to churn out the amounts by next week. However, the catch is that the refund will not be processed anytime, soon. In many households, this can be a problem. If you are in the process of a home sale, troubles are brewing. Federal loan processing takes a beating owing to this shutdown. This will affect millions of people beyond doubt.
Effect on people in rural regions
It is not only city dwellers in the USA those will suffer for the ongoing federal government shutdown, Farmers and agricultural agencies in rural regions will also be badly hit. The USDA loan processing will also be hit and delaying will be inevitable in the process. To make matters worse, the IRS help lines will not be accessible for those who need guidance or update.
Other effects of the government shutdown
Apart from the mass, government employees, others like disabled lot and unemployment benefit qualifiers may suffer owing to logger check processing. Passport and visa processing related activities will also become sluggish. Apart from affecting the tourism industry, it can also hurt business growth and prospects in US states. The museums and National Parks also remain closed.
As it has been noticed earlier too, a government shutdown proves to be dear for the taxpayers. People should be in constant touch with their creditors and cut back on spending for such trying times.