The Negative Effects of a Government Shutdown
From October 1 through 16, 2013, the U.S. government was shutdown forcing government employees to go home for the duration and government institutions were closed. People focus on the short-term effects that the shutdown will have but fail to see the larger picture and fail to focus on the long-term effects that the shutdown may have on the economy. The economy of the United States was negatively affected in two distinct ways during the government shutdown. The government shutdown forced the United States government to incur additional interest on loans while simultaneously losing millions, if not billions, of additional revenue. During the shutdown federal loans to individuals and small businesses were halted further hindered a struggling economy. Both of these consequences seriously affected the economy in a negative way and could have short-term and long-term effects.
“The shutdown cost the Federal government billions of dollars. The Federal government also incurred other direct costs as a result of the shutdown. Fees went uncollected; IRS enforcement and other program integrity measures were halted; and the Federal government had to pay additional interest on payments that were late because of the shutdown” (Burwell). The fact that the IRS was unable to collect any fees that were incurred during the government shutdown went uncollected further pushed the United States government into a bad situation regarding the national debt. The fact being that these uncollected fees pushed the United States government into a larger budget deficit for the reason that the government, most likely, continued to borrow money during the shutdown but the IRS could not collect certain fees and decreasing government revenue although government expenditures and government borrowing continued to rise. Additionally, the federal government was unable to pay off their loans that were incurred prior to the shutdown further haltering a slowly recovering economy. The fact being that the failure to payback their loans during the shutdown force the federal government to sustain unnecessary interest on those loans. Since, the federal government sustained the additional interests on their loans forces the government to payback these loans instead of injecting additional