5 Long Term Effects of the Government Shutdown

By emgreen on Tue, Dec 3, 2013 - 3:51pm

The beginning of October 2013 marked day one of the United States' first partial government shutdown since 1995 during the Clinton administration. With the House and Senate at each other's throats over how to fund Obama's healthcare plan, the government was forced to temporarily halt work in Federal agencies and services. For roughly seventeen days, federally funded services such as parks and museums, public housing services, passport agencies, immigration checking services, healthcare services and more were suspended until the powers that be came to a consensus decision.

Despite the A-list politicians in Washington still receiving their paychecks, more than 2.1 million government employees didn't. The short-term effects of the shutdown are clear, and a recent poll shows that morale among government workers has taken a turn for the worst. However, furloughed workers and closed down agencies weren't the only problems with the shutdown. Some effects will continue to sting for months on end. Here are some of the longer lasting problems the American people will face in the road ahead.

Science & Research Halts

Despite the reopening of the government on the 17th, the National Science Foundation has announced that it will cancel its planned expedition to Antarctica to study the region's food web. The news does not come as a shock as many scientists and institutions have been forced to face a large chunk of fiscal cutbacks in government funding.

In addition to budget cuts, the recent sequester and shutdown severely hindered the resources scientists needed to get the expedition off the ground. By delaying the trip, much-needed data for fields in ecology and astrophysics will simply not be available.   

Economic Growth Has Been Stunted

The squabbling in Washington will have a lasting effect on the nation's GDP. According to MSN Money, economists estimate that the shutdown has resulted in the gross domestic product dropping 0.5 points over the last few weeks while also missing out on 0.6 points the GDP was estimated to grow in Q4 of this year.

The stunt in growth comes as the result of a "ripple" effect that the shutdown has had on economic services. For example, the closing of the U.S.'s national parks caused many families to cancel vacations, which resulted in a significant drop in tourism. All of these shutdowns affect even the private-sector industries that rely on the support of active federally funded agencies.

A Decline in Consumer Faith

People in the public sector aren't the only group who is losing faith in the government. According to Thomson Reuters and those at the University of Michigan, consumers and those spending money in the public sector's confidence in the American economy has dipped 2.3 points on their Consumer Confidence scale. Experts estimate that consumer confidence in the market is at its lowest in nine months.

While faith in the economy has been rocky since the housing collapse in 2008, the recent shenanigans in Washington certainly haven't done anything to help the situation. The truth is, many Americans are uncertain about job prospects and economic and as a result, have cut back on disposable and discretionary spending. Many Americans are saving and spending money on protective services like insurance for worst-case scenarios. This comes at tough time for retail businesses and services that rely on Q4 and holiday sales.

Health & Disease Implications

The immediate shutdown of the U.S. government has a significant effect on certain sectors of the healthcare industry. One of the biggest short-term impacts was the National Institutes of Health being forced to turn away sick people hoping to sign up for the next rounds of clinical trials. The Washington Post estimated that roughly 200 patients missed out on potential treatments each week the shutdown persisted.

There are also longer-lasting potential health risks that have resulted from the shutdown. For example, The Centers for Disease Control and Prevention missed out on three crucial weeks to the effects of this year's flu viruses. Now researchers and health physicians are trying to play catch-up in order to prepare vaccinations in time for the flu season. Roughly 85% of all CDC employees were furloughed during the government shutdown.

Home Buyers Lose Out

For those in the market to buy up property, the shutdown may have been more a nuisance than expected. For the first few weeks of October, Government lending like mortgage financing services temporarily shut down, putting many homebuyers in an awkward position. Many loans such as the USDA Rural Housing loan could not be processed during the shutdown, and as a result, people buying property were forced to delay their purchases or pay a higher interest rate than expected.  

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