When the US government shuts down, what exactly shuts down, and what stays open? It seems that only some "fluff" stuff shuts down and the rest is deemed 'critical' and stays open.
In the upcoming situation, about 25% of the government will shut down.Before you call it “fluff,” in various situations you could have the military not get paid, Social Security checks be withheld, government contractors not be reimbursed for fuel, equipment, etc. that they delivered to the government…Hopefully, you get the point. One person’s fluff is somebody else’s paycheck.
What exactly is a government shutdown and what will happen to the treasury bond market if it happens?
When we hear about a "government shutdown" it is usually tied to the question of whether or not the government will raise the debt ceiling. If the government does not raise the debt ceiling from time to time then they will not have enough cash on hand to pay all of their expenses. The media refers to this as a "government shutdown" even though they still operate many aspects of government, because the government is forced to cut spending on some things so that they have enough cash on hand to pay their expenses. As for how it would effect the treasury bond market, I would argue that it won't effect the treasury bond market at all, at least for the next decade or two. The government will cut spending in almost every area imaginable before they default on treasury bonds because the impact of defaulting on treasury bonds would be huge. If the government defaulted on treasury bonds they would never be able to sell them again at such a low interest rate. In finance, a treasury bond is generally treated as a "risk free" asset since the u.s. government has never defaulted on the treasury bond. If they were to default then they would need to pay much higher interest rates on treasury bonds in the future to compensate consumers for the percieved risk.
What exactly is a government shutdown? Why is there a threat of shutting it down every 6 months or so?
The government cannot actually spend money unless Congress first passes a law authorizing it to do so. In theory, this is supposed to be done with a series of appropriations bills, one for each area of the government. In practice, Congress rarely gets them all done in time, so they tend to shove all the remaining spending into one large omnibus bill.In recent years, the republican party has decided that if they can’t achieve goals that they haven’t been able to get through the normal legislative process (currently this is getting Trump’s wall; previously it was repealing the Affordable Care Act) then they’ll shut down the government (either by not appropriating money to keep it open or by refusing to raise the debt limit to pay for spending that was already authorized).That’s what’s happening here - Congress previously passed some of the appropriations bills, but not all of them, so part of the government will shut down later this week because the government doesn’t have the legal authority to keep spending money. Since Congress hasn’t been able to come to an agreement on a budget for the next year, they instead did a short-term spending bill that would fund the government until February while they finish working out an agreement. The Senate passed the bill earlier this week, but the House was waiting for Trump to tweet about whether or not he’d sign it (as of this writing, he’s now saying he won’t).tldr: The government shuts down when it isn’t allowed to spend money, and this happens when Congress doesn’t pass a law allowing it to do so.
Why would government shutdown?
*I will answer this question assuming that it refers to U.S. government shut down and not some other country that may have a similar mechanism.A government shutdown occurs when Congress cannot agree on a spending bill (i.e. fails to appropriate funds) by September 30. If Congress does not agree on a continuing funding resolution, the President will be forced to shut the government down, meaning that all non-essential discretionary federal programs will close down. Essential services include defense, national safety, and security, are kept open, yet programs such as the EPA, HUD, FDA, Department of Energy are forced to shut down (note: agencies such as Medicare, Medicaid, TARP, and the ACA will remain open since their funding is automatic). The agencies that close down will result in the federal employees of these agencies being furloughed, thus preventing ordinary Americans from accessing the services provided by these agencies. The longer the shutdown occurs, the more the agencies will burn through saved-up funds, and the more services will close. If the shutdown lasts longer than two weeks, the economy will be negatively affected, since federal spending plays a part in the GDP calculation.
What does government shutdown mean?
It means that a committee will decide which government operations are essential and shut down those they deem as unessential. It isn't any where near as bad as some make it out to be. It has occurred 17 times in my lifetime. Most people will never even know because it really isn't a big deal.
Government shutdown what does this mean?
All that means is that the people in Government still get our money but they don't have to do anything for it. National Parks will be closed and you will not be able to get a VISA to travel abroad. Anarchy would be the best thing that could happen to this country right now.
What does a government shutdown mean?
everyone will not get paid until they come up with a budget. it will be decided if they have come up with a budget or if the Gov. will shut down at midnight tonight. So basically here is my example. i am 16 i will not get paid for my job at the mall. my mom will not get paid and since my dad is military even HE wil not get paid. but will congress get paid? yeah those stupid mo fo's will still get paid!!!!!!!! hope i helped a little bit .... basically it's BS.
What does government shutdown mean???!?
Well, here's what happened last time: Which services would stop? During the last major shutdowns in the final days of 1995 and early 1996, the government closed 368 National Park Service sites, along with national museums and monuments. In addition, 200,000 passport applications went unprocessed and toxic waste cleanup work at 609 sites stopped. The National Institutes of Health stopped accepting new clinical research patients and services for veterans, including health care, were curtailed. Work on bankruptcy cases could slow. In the last shutdown, more than 3,500 cases were delayed. Which services would the government keep running? Agencies are allowed to perform any operations necessary for the safety of human life and protection of property. The government would keep essential services -- such as air traffic control and the national security apparatus -- in full operating mode. Federal workers who provide medical care on the job would be kept on, as would employees who handle hazardous waste, inspect food, patrol the borders, protect federal property, guard inmates or work in power distribution. Workers who protect essential elements of the money and banking system would also report to work. The Postal Service, which is self-funded, will continue to operate. How many federal workers would be furloughed? The government went dark twice during the Clinton administration: Some 800,000 workers were sent home during the first shutdown and 284,000 were sent home during the later shutdown.