Eighteen days into the partial government shutdown and the economic hellscape is yet to start. At least that is what the mainstream financial media is saying. If you have read my writing in the past, you know my views on the mainstream media. But this time, I actually agree with them.
Economic experts say if the government shutdown lasts months or even years there will be a devastating impact on low income Americans:
- 38 million low-income Americans lose food stamps
- 6 million face an uncertain timetable for collecting tax refunds
- 2 million without rental assistance and facing possible eviction
- 800,000 paycheck-less federal employees plunged into dire financial straits
- Shuttered parks and museums while overstressed airports cause tourism to tank
- Federal court system slows to a crawl
- Disaster relief money doesn’t get to storm-ravaged areas
- Lapsed FDA and EPA inspections lead to dangerous outbreaks
- Private companies looking to go public are stuck in limbo
- Stock market plummets
President Trump playing hardball with the Democrats to get his wall funded and raise the debt ceiling is straight out of The Art of the Deal. But in our view Trump is on the losing side of the play this time. Democrats don’t have much to lose. The longer the Democrats hold out, the more pissed off all these low-income individuals will get. In our view it is a win-win for Democrats.
It is definitely not a win-win for the US economy. There is already news that some federal employees have walked off the job. I don’t blame them. These guys have no idea when they are going to get paid next and they still have to work. This is the basis of involuntary servitude! Furthermore, most federal employees work a shitty job that pay only $25,000 to $30,000 per year.
What is worse, with the Taft-Hartley Act of 1947, federal employees cannot strike. This was put into place so public workers didn’t strike and disrupt the ebbs and flows of the economic machine.
When will federal employees get paid next? No one knows for sure. But it could be indefinitely based on the current talks with Trump:
Question for Trump: How long are you going to keep the government shut down?
Trump: As long as it takes. I mean look, I’m prepared. I think the people of this country think I am right. Again, I could have had a lot easier presidency by doing nothing, but I’m here, I want to do it right.
Currently we are only in a partial government shutdown that is affecting around 800,000 federal employees. Half of these individuals are on a leave of absence, while the other half still have to report to work despite the lack of a paycheck. Even worse, if they don’t report to work, it could put their federal pension in jeopardy.
What is most alarming is by the end of February, 38 million low income Americans will lose their food stamps. This is bad. When you feed someone for years then take the food away there will be devasting consequences.
What is the worst-case scenario? Economic hellscape. If the government doesn’t get their shit together federal employees will walk off the job. Public services that you have depended on will shut down. Consumer spending will fall. GDP will shrink. The stock market will crash.