Talk grows of US government shutdown causing recession

Talk grows of US government shutdown causing recession
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President Donald Trump and Senate Minority Leader Chuck Schumer argue before a meeting at the White House in December. Photo: AFP The current US government shutdown has already entered its 26th day, nearly a week longer than the longest in government history. And there is no sign that the dysfunction will end, with President Donald Trump refusing to sign legislation to fund the government unless it includes money for a wall on the southern border. Democratic House Speaker Nancy Pelosi said she would not support legislation that provides any cash for the wall, at least nothing in excess of $1. The partial shuttering, which affects about 800,000 government employees of agencies that have not been funded, also affects around 4 million government contractors, according to some estimates, who will not necessarily receive any kind of back pay. But the employees who are hit don’t tell the whole story about how this will impact the US economy. For one thing, the shutdown could weigh on business investment, as Bloomberg writes on Wednesday: “Companies might delay investment due to regulatory disruptions — already there are ominous signs. Thanks to the lack of government workers to grant regulatory approval, new products from aircraft to beer to trucks can’t be released. That uncertainty will almost certainly give companies pause about investing. If anxieties about the decline in demand due to the shutdown make companies even more reluctant to invest, the result could be that many businesses stampede for the exits.” This could have […]

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