How Will A Government Shutdown Impact The Country?

How long will the current government shutdown last? It could end by Monday morning or, as Donald Trump suggested, it could go on for weeks, months and theoretically years. Many of us hope that shutdown will cease sooner rather than later because, as you might know it plays havoc with the economy and the country as a whole. The shutdown is only the eighth to make it past ten days so let’s look at some of the impacts it could have if the state of affairs continue as they are.

Kill Commercial Real Estate

You might be eager to invest in some new real estate for your business. There are many companies helping with real estate transactions and making sure that business owners can access the loans they need. While these businesses are filled with experts, during a government shutdown it becomes far more difficult to arrange and organise a loan that you need. Indeed, it’s quite possible that if you are looking to invest, you will have to wait until the shutdown ends if you need to arrange a loan to buy any property. This is true regardless of whether you are a private citizen or a business owner.

No Refunds

When the government shuts down, employees disappear. They go home or get stuck in Washington and this means that there is no one around to handle certain jobs. That includes refunds from the IRS. So, if you were counting on a big cheque coming in this month, you might be disappointed. If you were relying on this refund as a potential source of income or to cover debt, this can be potentially devastating.

Changes In The Economy

You don’t have to be a financial expert to see that the government shutdown is and will continue to negatively impact the economy. The value of the dollar is dwindling, stocks are falling and the economy could ultimately begin to slow down. Of course a weak dollar could be either good news or bad news depending on your industry and employment status.

Government Contracts

You might be running a business that relies on contracts to the government. This includes various companies and in cases of a shutdown, these contracts immediately cease. While this may be temporary, it can still be enough to impact your revenue stream and cause issues with cash flow. The good news is that the current shutdown is technically only a partial one. While this still might damage prospects, it could mean that areas of the government you sell to can keep their lights on.

IPO Applications

Finally, IPOs are typically delayed due to a government shutdown. This happened during the albeit very brief 2013 shutdown so we wouldn’t be surprised to find that it happens again this year. So, while your business might be ready to go public, you’ll probably have to delay your plans until the government opens up their doors and declares the country open for business.

We hope this helps you navigate some of the rocky issues caused by a government shutdown.