Since the government shutdown started Oct. 1, around 800,000 federal government employees were furloughed with the promise of backpay only granted later.
Many have since returned to work, but the impact of such numbers will undoubtedly take a negative toll on the U.S. economy and create chaos.
The last shutdown in 1995 cost the government $2.1 billion. If similar circumstances were to happen now, it would shave off as much as 0.9 percent of U.S. GDP from this quarter, according to an article published by BBC News.
Though people fear this outcome, the economy is expected to become worse than it was in 1995.
During that time, the economy was booming and moving toward upward growth, which is not the case today.
In 1995, former Speaker of the House Newt Gingrich and former President Bill Clinton were open to discussion and coming up with a compromise, which President Barack Obama and Speaker of the House John Boehner are not.
According to USA Today, Obama and Boehner both rejected a compromise on the debt ceiling and shutdown circumstances Tuesday.
But the U.S. economy cannot afford such tactics right now.
With so many people laid off as a result of the shutdown, and the return of compensation to come only once the government starts up again, less money will be circulating in the economy, causing the expected outcome of deflation.
According to an article published by CNN, several negative effects may arise, including many big companies hesitating to invest in buying any equipment or hiring workers, due to the uncertainty in future sales.
Estimates from IHS Global Insight report the current shutdown is costing the country $300 million a day or $12.5 million every hour, totaling $3 billion in the 10 days since shutdown – almost a billion dollars more than the 1995 shutdown.
Let’s not forget too the impending D-Day on Oct. 17, in which the “D” stands for default and the government will be forced to either reach a compromise or lose the country’s ability to spend on credit.
In order to get the government back in motion and avoid such economic impairment, there must be a compromise. An effective budget must be laid on the table and dialogue must continue incessantly between the democratic and republican parties until they form an agreement.
Stalling this process will only bring the U.S. into an economic nightmare, leaving many people unemployed and penniless.
Lama Alqasemi is a freshman majoring in mass communications.