Economics - The Impact of Government Shutdown in 2013
Oct 1, 2013 - Today US government shuts down after 17 years, since congress missed the deadline of midnight Sep 30, 2013 for government funding. Any shutdown is not good for the economy and it will push the dollar down in general.
With the current shutdown, around 800,000 federal workers might get affected with furloughs. Mainly the national parks and non-critical departments will be closed. The impact of the shutdown depends on how long it takes. If it is only for 2-5 days, then it will have minor impact. But it crosses over 14 days, then it will have serious consequences. People cannot afford to pay their mortgages, utility bills and spend money for day to day living expenses.
Overall the economy will get stressed out and it creates big sell off in stock market as well as greenback. It does support gold prices towards safe heaven buying. Oil prices will move down because of weaker demand.
The Republican controlled house and Democratic controlled senate have difference in their views especially towards Obama Care. The Republicans wants to know in depth about the real cost of implementing Obama Care and they want to add additional taxes on medical devices to fund Obama Care. There is a series of events need to take place on congress on Obama Care, Shutdown and Debt Ceiling.
The uncertainty is not good for stock market and we may see a huge sell off in the next 4 to 8 weeks. The weaker dollar and rising rates in the short term is good to rebalance your portfolio from your investment perspective. But the Govt Shutdown is really bad and it will severely affect the people immediately.