The primary issue of a Govt. shut down is Budget Deficit. During the ruling period of Clinton in1994, there were two full government shutdowns: period of these shut downs was lasting 5 and 21 days respectively. These were the longest and most severe types of Govt. shutdown in the history of America. These shutdowns resulted in to huge furloughs and big disturbance.
The recent shut down happened from October 1 to October 16, 2013. Main reason of clash between the Republican-controlled House of Representatives and the Democratic Senate was the Republicans’ desire to delay or defund the Patient Protection and Affordable Care Act, signed into law in 2010. A bill showing need to end the shutdown, through January 15, 2014,and funding agencies passed the Senate and the House and was signed into law on 17October, 2013.
The prime reason of this repeated “shut down” was, Federal government had no choice except this. Politicians on Capitol Hill have failed to agree a new budget for the 2013-2014 financial years when The US financial year ended on 30 September. No budget deal could be approved by both parts of Congress, (the House of Representative and the Senate).As a result US government has begun shutting its non-core services.A big figure of workers are waking up to the news that they are on unpaid leave, without clear notice that how long this period will go on. The shutdown will bring a range of services to a cessation across the largest economy of the world. If people are not being paid, they will not spend as much in the shops. In addition, they are not capable to fulfill financial commitments, such as credit card payments and mortgages.
Global Insight has calculated that it will knock $300m a day off US economic output Main headache is how long it will last. Analysis shows that a shut down for two weeks, would cut 0.3% off US GDP, while a month-long suspension of operation, would knock a whole 1.4% off growth.
If the shutdown is hitting worst on federal debt, which will be evidenced when congress would not be able to work it within a month. Foreign investors would really start to worry about the power of U.S Economy, they can become weak to pay back loans, triggering higher interest rates from foreign lenders. At extreme, Global investor may not trust in doing transactions.
Govt. shut down impact on Education
According to Molly Green berg, Education Staff Writer for In the Capital,Shut down of Govt. at bigger level of education level will not impact the awarding of student aid or servicing of loans – recently. Borrowing service at market level will have to wait to receive compensation and no new contracts will be awarded. View of Green burg is that a shutdown period last for a week, reduction of educational grants will occur. Likewise, as more than 90 percent of Education Department Staff have been made redundant, University College at Ohio will inevitably experience a delay in receiving grants later in the year. Long-term effect on financial id, employees of federal work-study would be made redundant. Unluckily, veteran and armed Services Students, Congress is failed to complete 2013-14 fiscal year budgets, with Federal Tuition Assistance is being dismissed till further notice.
Ohio’s Public K-12 education is likely to not be affected should the shutdown be a short-term event. Head Start, Title I, education of all aspects tend to be unchanged should the shutdown persist only within October. Shut down for extended period, as debated by Alyson Klein from Ed-week, will ceased availability for cash flows for districts, colleges and universities, and vocational rehabilitation agencies that depend on support. Where K-12 has been most pretentious during shutdown is in enrichment activities such as field trips to our nations’ parks, historic locations, NASA, also other federally supported locations.