“What Causes and what does shutdown of The Federal Government mean?” First off it means that any organization, institution or government agency deemed non essential would be shut down. Museums, Zoos, national parks and government agencies like the IRS etc. Any agency vital to national security would continue and the simple answer for what causes it is there is no money to keep them open.
Could this affect the economy or individuals?
Because everything is so different today than it was the last time the federal government shut down in 1995, no one knows for sure what the fallout will be but it is for sure it will not be good.
You might be wondering what the problem is then; why don’t they just approve the budget and let things stay normal? If the present budget is approved as it stands, it also means that the government will have to borrow the amount of the deficit to continue. There are some in Washington which include Many Republicans and the new ultra- conservative Tea party members who are insisting in a large reduction of the proposed budget and therefore will not approve the present budget as it stands. There have already been some reductions but not enough, so the opposition says.
So presently there is a standoff as the shutdown looms on Friday when the debt ceiling is reached and there are no funds to continue.
The Real Problem
The real problem is the unimaginable 14 + trillion dollar national debt and those who oppose are alarmed and want to keep it from getting further out of control but is that possible is another question? Many believe that it is already past the point of no return and the only remedy is to maintain it, since paying it off is out of the question.
Here is the problem: what it takes for the federal government to get by on now far exceeds what comes in through taxes etc. so it is necessary to continue to borrow more in order to continue things as they are.
The Doomsday Clock
Why then don’t they reduce government programs to the point where there is no deficit? That is easier said than done because more than two thirds of the budget concerns entitlement programs like Social Security, Medicare and Medicaid and the military which hardly anyone wants to cut. Cuts can and are being made but even then they fall far short of balancing the budget so at any rate the national debt ceiling will once again have to be raised and that brings the hands on the doomsday clock just a little closer to 12 midnight.
What I mean by doomsday is that somewhere in the future there is a day of reckoning where there is going to have to be a showdown. At that time the government will no longer be able to pay the bills, countries loaning money to the United States will no longer be willing to loan and consequently the dollar will go bust and then there will be world wide repercussions.
At this time the closely knit worldwide economy will fall apart; distribution will come to a standstill; store shelves will empty in 3 days; industry will grind to a halt; unemployment will be monumental; there will be riots in the street; anarchy will be declared and government troupes will try to quail the uprising.
You may be thinking all that is impossibility because it never happened in this country before. I would like very much to believe that you are right but logic tells me differently.
What does Logic tell us?
Listen to some logic: Your family and mine depend on a household income to pay the bills. If our household income is not enough to pay the house payment, what do you suppose happens…foreclosure! If we are no longer able to pay the car payment, what happens…reprocess ion! Why then do you think the Federal Government is different? When it can no longer pay the bills or borrow the money or print the money, what is going to happen…just things as usual! If this is what you believe, you better wake up from your pipe dream…it is not going to happen! So What Causes and what does shutdown of The Federal Government mean? To you and me it means:
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