Jill On Money: Shutdown-o-nomics 2025

Once again the U S establishment has shut down since there have been Beyond shuttered national parks and museums there are plenty of direct and indirect financial consequences Here are the questions that I have been fielding How will the greater part Americans experience the shutdown Federal workers will bear the brunt of the stalemate During the - shutdown which lasted days nearly federal employees were either furloughed or were forced to work without pay Additionally active-duty military personnel will likely forego pay during a shutdown This time around the OMB has threatened mass firing of federal workers which would increase the numbers All administration and military workers wages will eventually have to be repaid when the establishment reopens I m a federal worker-without pay Should I spend my cash on hand or use my credit card This is an emergency so use that fund first If you deplete it you may need a short-term lifeline to bridge the gap Before you run up your credit card balance consider a home equity line of credit or borrow from your retirement accounts Do notify credit card companies landlords mortgage servicers or anyone you owe money to if you think that you are going to be late or miss a payment What about Social Prevention Medicare and Medicaid All three are authorized through separate laws so checks and benefits will continue to flow Military pension benefits will be paid and Veterans Hospital facilities are expected to remain open Likewise for recipients of other benefits like the Special Supplemental Nutrition Campaign for Women Infants and Children WIC and Supplemental Nutritional Assistance Undertaking SNAP benefits However enrollment in all of these programs could be delayed due to staff reductions Do I get a break on tax estimates or participant loan payments No dice the IRS fully expects you to pay your taxes as does the Department of Mentoring If you use snail mail for these payments the postal system is open The housing realm has shown signs of life Will the shutdown stop the progress A shutdown would mean that there will be no authorization for new policies offered by the National Flood Insurance Scheme NFIP which could impact closings The National Association of Realtors estimates that this would put at least property transactions per day at vulnerability Existing policies will remain in effect There should only be limited impact on government-backed mortgages through Fannie Mae Freddie Mac Ginnie Mae and FHA VA However based on past shutdowns there could be delays in processing loans What about markets Will a shutdown cause investor angst Unlike a debt default a shutdown does not affect the authorities s ability to pay its obligations so if you own a executive bond you will continue to receive interest payments Overall shutdowns have historically had a limited impact on markets though there could be big swings along the way How does a shutdown affect the Federal Reserve A shutdown could be an issue for the Fed because the collection and dissemination of economic material could halt That means that the September employment assessment and upcoming inflation reports may not be distributed and without these and other facts points the central bank may be more cautious and do nothing or even choose to delay its next procedures meeting later this month October - Could a shutdown cause a recession In the past for every week of a shutdown real GDP is reduced by about a tenth of a percent The Congressional Budget Office analysis of the - shutdown determined that the financial sector lost about three-tenths of a percent of increase Whatever economic hit we would see is likely to be short-lived and swiftly reversed Jill Schlesinger CFP is a CBS News business analyst A former options trader and CIO of an funding advisory firm she welcomes comments and questions at askjill jillonmoney com Check her website at www jillonmoney com