During his 2016 campaign, President Donald Trump promised to build a wall separating Mexico from the United States. On December 11, 2018, Trump requested $5.7 billion funding to start building. 1 That request was denied, thus beginning the stand-off — the government shutdown. This is the second shutdown of 2018 2, that has now carried into 2019—it’s the longest shutdown in history, and the 18th shutdown, ever.
The second-longest government shutdown occurred in 2013. It lasted a total of 16 days after Congress could not agree on a budget for the new fiscal year.3 During the shutdown more than 90% of IRS workers were furloughed, which resulted in a delay of almost four billion dollars of refunds.4 Reviews of veterans’ disability applications also stopped, leaving almost 20,000 applications per week unevaluated.5 The shutdown cut GDP growth in the fourth quarter of 2013 by 0.2 to 0.6 points, resulting in 120,000 fewer jobs.6
So far, the effects of the 2018-2019 shutdown have been even more severe. Right now, 850,000 government employees are working without paychecks.7 The furloughing of the IRS employees has delayed over 39,000 loans, including mortgage loans, small business loans and USDA loans.8 And according to an analysis from S&P released on January 11, 2019, so far the shutdown has cost the U.S. economy $3.6 billion.9
One thing to remember as the shutdown continues to loom is that behind all these stats are people suffering from financial stress. And the fallout is having a resounding impact on society as a whole.
As the negotiations persist with no clear end in sight, we’ll likely see more delays, more unemployment and more negative effects on the financial realm. Hopefully, a resolution will be reached in the next few days and the government will be up and running again.