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What is a Government Shutdown? Causes & Consequences

by Priya Shah – Business Editor

Americans Face Closed Doors as US​ Government Shuts Down

A US government​ shutdown is now in effect, triggered by a failure‍ to agree‍ on a federalbudget. This essentially halts non-essential functions of the ⁤federal‌ government due to a lack ⁤of funding.

The immediate outcome is a cessation of pay for federal employees, including civil servants, military personnel, and crucial roles like air traffic controllers. Federal institutions such as national parks and museums are also forced ⁣to⁢ close⁤ to the public.

The economic impact is meaningful. Goldman Sachs estimates that⁢ the shutdown is currently reducing US economic growth by 0.2 percent per week while it continues.

Government shutdowns have become increasingly frequent in the United States‌ over the past three decades. This trend is largely⁤ attributed⁣ to closely contested elections‍ resulting in narrow majorities in both the House ‌of ​Representatives and the Senate,fostering political gridlock.

The longest shutdown in US history occurred during Donald Trump’s first term as president in 2018-2019. Trump refused ⁤to reopen the government without​ securing additional funding for​ a wall along the US-Mexico border. Despite⁣ his demands, democrats maintained their opposition. The shutdown ultimately ‌ended after 35 days, prompted by disruptions to air travel as unpaid​ air ‍traffic controllers were unable‌ to work, creating widespread chaos. Ultimately, Trump did not receive the additional ​funding he sought for the border⁣ wall.

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