Government Shutdown: Oh Yes They Did!

Each year Congress decides on a budget for the upcoming year by the deadline date of September 30.  This budget is essential in continuing to fund government run jobs, tourist sites and activities, parks, and other resources funded by tax-payer money.    

There have been several partial and full government shutdowns that have occurred in past administrations, the last and longest shutdown occurring during the Clinton administration lasting 21 days.  

So, what is this current shutdown all about and what does it mean for our country and economy in the present?  

Flashback to Social Studies:
Congress, which is comprised of the House of Representatives and the Senate hold the "Power of the Purse" and are responsible for approving a budget, which then passes to the President to be signed or vetoed and sent back to Congress again.  Many challenges occur in the process of Congress agreeing on bills and budgets.  This is primarily due to the fact that the House and the Senate are usually dominated by opposing parties with differing agendas.  Currently, the House is run by the Republicans and the Senate is run by the Democrats.  Therefore, a budget is proposed in the House (Reps) and then passed through to be approved by the Senate (Dems) before finally passing to the President.  All three parts must approve in order for a bill or budget to be put into law.  

And If Not:
Currently we are living the consequences of these three parts (two parts of Congress and the President) not agreeing on a budget for the upcoming year.  This is really not surprising as an entire federal budget has only been passed four times in the past 30 years by the scheduled deadline.  However, short term (stopgap) bills are usually passed in order to temporarily appease everyone and stop the government from shutting down.  

What Is The Issue:
In this case even the short term bills were not able to be passed.  The main issue is Obamacare.  The House wanted to defund and currently would like to postpone Obamacare for a year due to the fact that certain big businesses, certain government workers, and employees of the three branches of government are able to postpone for a year.  The House believes that every American should have the same postponement that members of government have.  The other angle is of course that there will be several upcoming elections in the House and Senate in November and the House hopes to gain support through these elections that will help sway Congress in defunding Obamacare.  The Senate has rejected this delay.

What About Us:
Aside from essential government workers (national security, public safety, essential activities) an estimated 800,000 people are off of work without pay until the government reopens.  This effects our economy because if the shutdown continues these employees may need to collect unemployment, will struggle to support their families, and they will stop spending and investing.  

What About Them:
This effects the global economy because the U.S. is the largest consumer in the world and if our economy weakens then we stop producing and consuming from other countries.  This will also scare other countries from investing in U.S. stocks and bonds, further weakening our economy and credibility in the world.