Sichong Ye 1477207 Econ 197
The economic consequence of government shutdown
The article Shutdown Will Cost Government $3 Billion of Projected 2019 GDP in The
Wall Street Journal explains the effects of the shutdown of a government operation that ended
recently. According to the article, the shutdown has various economic impacts such as an
increase in unemployment rates during the shutdown period. The primary purpose of this paper
is to discuss the economic growth of based on the government action to shut down some of its
operations form a specified period.
In the article, the author states that the partial government shutdown will cost the states
amount totaling to $ 3 billion. The cost will translate to 0.4 percentage decrease in annual gross
domestic product growth in the first quart during the current financial year (Ylan). During the
partial shutdown, most of the economic activities were dampened thus causing adverse economic
effects on the states. For example, throughout the shutdown period, approximately 38,000
workers were not contributing to a gross domestic product because they dampened economic
activities. As a result, there was a delay in federal spending especially on good and services
which subsequently led to a reduction in aggregate demand.
The shutdown was marred with some negative implications on economic growth because
some small business operators could not obtain federal permits to enable them to run their
business legally (“CBO: Shutdown Will Cost Government $3 Billion of Projected 2019 GDP.”).
Consequently, such factors led to most firms and private investors postponing their investments
decisions to future dates when economic status will be favorable for investment activities. The
latter is likely to cause financial crisis because if investor delays their investment, there will be
less economic activities in different parts of the states. As a result, the Gross Domestic Product
will reduce hence leading to the financial crisis.Jessica Santiago92700000000017235a 0.4% decreaseJessica Santiago92700000000017235Jessica Santiago92700000000017235Confusing cause and effect; workers were not contributing because of the government shut down, which consequently caused the lack of economic activity, not the other way around.Jessica Santiago92700000000017235quarterJessica Santiago92700000000017235Title of newspapers should be italicized.Jessica Santiago92700000000017235Important words should be capitalized; The Economic Consequence of Government ShutdownsJessica Santiago92700000000017235Title of articles should be in quotations.Jessica Santiago92700000000017235an investorJessica Santiago92700000000017235Title should be in boldJessica Santiago92700000000017235Good introduction and thesis; thesis should be more specific, maybe mention a few numbers that show economic growth.Jessica Santiago92700000000017235
Sichong Ye 1477207 Econ 197
According to CBO, the shutdown which lasted for approximately 35 days reduced the
fourth quarter gross domestic product by roughly $ 3 which translates to 0.1 % decrease in the
state’s GDP. As a result, CBO estimated that the effect would lead to a reduction in the real gross
domestic product by $ 8 in the first quarter of the preceding years (Stewart). The shutdown will
significantly affect economic growth of the state. For instance, before the closedown, the agency
projected a gross economic growth of 2.3 % in 2019, but this will not be possible because the
shutdown affected many sectors of the economy.
Although the shutdown temporarily halts government economic activities, the power as
mentioned above failure have also imposed substantial effects on the economic growth. For
example, the other cessation was characterized with both direct and indirect cost which included
loss of output by the federal employees as well as weaker economic growth.
Another significant shutdown which exceedingly affected the state’s economy took place
in 1996. During which there were various economic effects including costing the government
amount totaling to $ 1.4 billion (Kate). Typically, government shutdown causes an adverse
impact on the economy whenever they happen. Unemployment is one of the main effects which
result in case of temporary termination of government activities (Zuo). Also, the government is
likely to have balance deficits because it will not be able to generate enough revenue to fund all
Additionally, the CBO projected that due to uncertainties caused during the government
shutdown, there is the possibility of federal budget deficits because a large number of employees
will be offloaded hence reducing government revenues. As a result, the CBO projected that due
to such uncertainties, the federal government would have an average deficit of $ 1.2 trillion for
the next decade (“CBO: Shutdown Will Cost Government $3 Billion of Projected 2019 GDP.”).Jessica Santiago92700000000017235$3 billion
Sichong Ye 1477207 Econ 197 This will translate to approximately 4.4 % of the state’s real gross domestic product. Therefore,
if such shutdowns persist over the years, the federal government will be losing a significant
amount of money annually. Consequently, the rate of unemployment will increase which will
impressively affect the state’s gross domestic product. Similarly, the federal government debts
will; increase because the government will go for external funding to fund its spending.
Conclusively, the recent temporary government shutdowns have much affected the
government. The gross domestic products have been reducing whenever there is such
discontinuity because many employees are affected thus decreasing the federal government
source of revenues. Also, shutdown leads to budgetary deficits thus, forcing the federal
government to go for external funding.
、Jessica Santiago92700000000017235Overall, the ideas in this essay are good but they need more developing and statistics and theory to back it up.Jessica Santiago92700000000017235This is barely 50 lines, be careful about length of your essays!Jessica Santiago92700000000017235Be careful of subject-verb agreement.Jessica Santiago92700000000017235Breakdown of scoring (based on rubric): 9, 8, 8, 10, 8, 8, 7, 9, 8, 5Jessica Santiago92700000000017235Try not to lead the conclusion with “conclusively” or “in conclusion” as they are seen as cliche.Jessica Santiago92700000000017235Try to end on a more conclusive thought like a policy suggestion.
Sichong Ye 1477207 Econ 197
A measure of economic growth and unemployment
Year GDP Growth Unemployment Rate Business Cycle Phase 2007 1.8% 5.0%Dec peak. 2008 -0.1% 7.3%Contraction. Financial Crisis. 2009 -2.5% 9.9%June trough. 2010 2.6% 9.3%Obamacare. Dodd-Frank. 2011 1.6% 8.5%Expansion. 2012 2.2% 7.8%Expansion. 2013 1.8% 6.7%Expansion. 2014 2.5% 5.6%Expansion. 2015 2.9% 5.0% 2016 1.6% 4.7%Strong dollar. Low oil prices. Fed raised the rate.
2017 2.2% 4.1%Weakening dollar boosted growth. 2018 2.3 % 3.9%rate
The table is used to show a measure of domestic economic growth and unemployment
rate for the last ten years.
Works Citedhttps://www.thebalance.com/2008-financial-crisis-3305679https://www.thebalance.com/what-is-obamacare-the-aca-and-what-you-need-to-know-3306065https://www.thebalance.com/dodd-frank-wall-street-reform-act-3305688Jessica Santiago92700000000017235Each figure should have a title like “Figure 1” so that it can easily be referenced in your paper.
Sichong Ye 1477207 Econ 197 Davidson, Kate. “CBO: Shutdown Will Cost Government $3 Billion of Projected 2019
GDP.” WSJ, 28 Jan. 2019
Mui, Ylan. “The Shutdown Cost the Economy $11 Billion – Including a Permanent $3 Billion
Loss, Government Says.” CNBC, 28 Jan. 2019.
Stewart, Emily. “The Shutdown Cost the US Economy $3 Billion That Isn’t Coming Back.” Vox,
28 Jan. 2019.
Jiaxin Zuo. “CBO: Shutdown Will Cost Government $3 Billion of Projected 2019 GDP”
Economic Rhetoric: Using Economic Theory and Empirical Evidence in Arguing Policy.
UC Santa Cruz. Santa Cruz. 30 January 2019. Lecture.Jessica Santiago92700000000017235You need either a direct or indirect quote from a classmate from an in-class discussion for all Article Exploration Assignments.