Government Shutdown was the period when the routine operations of the United States federal government were curtailed. This happened because the legislative body was not able to successfully pass the legislations related to the funds for the next fiscal period. This shutdown continued to several days and was considered to be the third longest government shutdowns in the history of the United States that took place in the last quarter of the year 2013 (Kille, 2013).
From the past government shutdowns, the fact has been exposed that it only leads to negative and far reaching impacts on the overall financial system and wealth of the county. In a very similar manner, the 2013 government shutdown has also exhibited unnecessary damage on the economy of the United Sates. Economic disruption, harmful effects on Federal programs and services (that were supporting businesses and citizens of United States), loss of revenues to the government, and impacts on the Federal workforce, and negative impacts on tourism are few of the severe consequences that occurred due to 2013 government shutdown (Burwell, 2013).
While discussing in detail the effects of 2013 government shutdowns, the first to mention is the lay off and dismissal of a large quantity of federal employees. This indicates the fact that more than eight hundred thousand government employees and public servants were furloughed or was sent on unpaid leaves for an indefinite period during this phase of government shutdown. At the same time, millions of workers (who were exempted government employees) were also obliged to report on duty where their paychecks had been delayed and they were not even informed when they would be given their salary amounts (Kille, 2013).
The second impact of the 2013 government shutdown is the loss of costs (between 2 to 6 billion dollars) in the economic output associated due to this shutdown. As an outcome of this furlough, the government has to experience the loss of billions of dollars on weekly basis, which was considerably one of the huge losses that ever occurred in the history of the country. The cost to the federal government of billions of dollars was mainly attributed to the expenditure spent on the employees’ payroll that were furloughed, and the productivity that was gone with them. Moreover, due to this furlough, many of the government functions were also suspended that includes air traffic control, training and support of these services, and so on (Burwell, 2013).
Apart from the loss of billions of dollars from the furloughed employees, the federal government had also incurred various other direct and indirect costs due to the 2013 shutdown. The federal government had loss to millions of dollars from the tourism expenditure that was collected from the national parks of the country. In fact, the enforcement of Internal Revenue Service (IRS) and other related program measures were halted as a result of this shutdown. As a consequence of this IRS shutter, the federal government also faced significant delays in processing as well as in issuing tax refunds. Moreover, the audit reports of taxpayers were deferred as well. Indeed, additional interest amounts were included for the federal government because timely payments were interrupted and turned into late payments (Burwell, 2013).
The drastic and negative effect on the economy of the United States is noticeably one of the broad spectrum consequences of the 2013 government shutdown. The curtailment and suspension of the many of the government services and agencies is the direct impact of the shutdown on the U.S. financial system. Trade, which is one of the vital sources of U.S. economy, has dramatically been affected, as the applications as well as the issuance of the licenses for the business of import and export were delayed and put on hold. Due to this delay the overall trade of the country was negatively affected because of the shutdown (Burwell, 2013).
Furthermore, it has also come to notice that importers and exporters also experienced postponement for many products that required approval from agencies before they can be imported or exported from the country. This typically happened because many of the regulators were furloughed. For instance, the import of pesticides, lumber, steel, etc. were delayed or halted because of the furloughs of the federal employees. Consumer and business confidence is one of the severe damages that have occurred due to this shutdown (Needleman, Loten & Simon, 2013).
Businesses also contributes to the economic activity of the country, however, due to the shutdown, small businesses were not able to receive loan amounts from banks and other private sectors, since the banks were not able to gain access to the verification services that is an essential procedure before the loan is passed. Due to this reason, the federal loans were put on hold and this entire procedure was disrupted because of the shutdown. Moreover, many of the government projects were also shuttered since the federal permit were not sanctioned or delayed as a consequence of shutdown, which eventually left a harsh impact on the overall economic conditions of the country (Burwell, 2013).
Governments also contracts and hires manufacturers for the federal projects, however, these contractors and manufacturers experienced disruptions at the time of the government shutdown. These disruptions were typically in the form of non-payments for the jobs that they had already complemented. Indeed, the shutdown also prevented these contractors and manufacturers from delivering goods (Needleman, Loten & Simon, 2013).
Travel and tourism industry is also one of the gargantuan industries contributing to the economic welfare of the United States. In fact, the last quarter of the year plays a significant role in generating sales from the national park services that include national parks, museums, and tourists’ sights across the country, such as Alcatraz in San Francisco and the Statue of Liberty in New York. This reveals the fact that the admission feed and concession stand sales are huge contributing aspects to the economy of the country. However, the disruptions in the travel and tourism at the national parks and monuments caused a hurting and negative impact on the surrounding local economies and communities (especially the ones who profoundly rely on the federal government) (Burwell, 2013).
Even though the shutdown of tourist sites and national parks looks to be a minor inconvenience, but, the economic impacts that it leaves can be major and dramatic. This principally leads to the fact that the tourism-related sales that are generated from the national parks and monuments are immensely affected by the close down of these places. Unfortunately, the records have brought the fact into the limelight that local communities have to experience losses in millions of dollars of revenues on everyday basis from the tourist industries and airlines (Plumer, 2013). This is particularly due to the reason that hundreds and thousands of people visit these parks and monuments on every day basis particularly in the last quarter of the year, which exhibits the fact that millions of dollars are being spent by the visitors to such places (Alter, 2013).
Therefore, according to the reports, the long shutdown period caused the economy of the country that came from travel to forfeit to over 150 million dollars per day. Reports also exposed that decrease in the hotel occupancy across the nation was also observed to a substantial percentage over this period of shutdown. Indeed, it not only hampered the sales in tourism industry but also created a level of frustration amongst the visitors and tourists (especially those who are from outside the country). This leads to a long-term negative impact on the sales of the tourism industry (Alter, 2013).
The effect of 2013 government shutdown is not only limited to the economy of the United States, but, it has also affected millions of citizens who are solely dependent upon the critical programs and services offered by the federal government. The shutdown has halted these programs and services due to which significant amount of patients are not being able to enroll them in the clinical trials at the health institutes at national levels. Moreover, the American populaces who comprehensively rely upon the tax refunds are also affected because the process of tax refunds has been delayed to a great extent (Kille, 2013).
The general population is also adversely affected by the shutdown for the reason that the Agencies related to the Food and Drug Administration, Environmental Protection and various others have hold back the inspections being performed on health and safety matters. As an outcome of it, the health and safety of the common man was at stake during this period of shutdown (Burwell, 2013).
Federal government in association with for Centers for Disease Control and Prevention ensures that the natives of the country are protected from diseases like flu. Therefore, in the last quarter of the year (the winter season) monitoring program is carried out to analyze the spread of flue within the country so that vaccine programs are directed at its best across the country. However, due to the government shutdown the concerned agency became powerless to…