I was going to write about what is sometimes referred to as “the poverty trap”, but today is the last day of the government’s fiscal year. As of right now, we expect the government to shut down tomorrow because there is no continuing resolution, much less a federal budget to authorize government spending.
USA Today’s story “66 questions and answers about the government shutdown” ended with the following points about what it means in the long run:
“64. How much money would a shutdown save taxpayers? Most likely, it wouldn't. The Committee for a Responsible Federal Budget says shutdowns cost money in terms of contingency planning, lost user fees and back pay. A government estimate after the shutdown in 1995-96 estimated its cost at $1.4 billion.
65. What effect would a shutdown have on the economy? Economists say even a short shutdown — of three or four days — would begin to shave decimal points off economic growth. A sustained shutdown of three or four weeks "would do significant economic damage," economist Mark Zandi told USA TODAY.
66. What about the stock market? The Standard & Poor's 500 fell 3.7% during the 1995-96 government shutdown, according to S&P Capital IQ. Stocks quickly rebounded after the government got back to work, rising 10.5% the month after the shutdown ended.”
The economic recovery hadn’t really trickled down to very low income people like the homeless families we serve, so we’re fervently hoping a fragile economy isn’t dealt another setback.