WASHINGTON (CBS4) – While much of the focus on a potential government shutdown has focused on government employees; the shutdown also runs the risk of having far-reaching impacts economically.
“The key question is how long will the shutdown last,” said Manuel Lasaga of Strategic Information Analysis Inc. “I think it could be anywhere from hours, to days, and perhaps several weeks.”
But the question on everyone’s mind in South Florida is how will the shutdown impact my finances?
“I think South Florida is not that exposed because federal employment in South Florida is barely 2.5 percent of total employment,” Lasaga said. “I don’t think we’re going to feel much of anything.”
Businesses who supply goods to the federal government, economists who rely on government data, and businesses near federal facilities all stand to lose millions as the government grinds to a halt.
According to the New York Times, the last time the government shutdown in 1995, “the nation’s economic growth was slowed by as much as a full percentage point in that fiscal quarter.”
The Times found that federal spending dropped from 14.2 percent in the previous quarter to 8.6 in the shutdown quarter.
If businesses who supply goods to the government contractors end up not being able to ship their goods, they will have to find somewhere to store them and that runs the risk of increasing costs and hurting job growth.
Lenders who issue Federal Housing Authority, or F.H.A., loans may cut back on them if the shutdown remains long-term.
“I think this is the first episode that we’ve seen where the federal government can’t manage the budget. This is going to create a lot of anxiety,” Lasaga said.
That spells trouble for financial markets here and around the world.
Click here for how the shutdown could impact Everglades National Park.
Click here for the overview of the government shutdown.
Still, the biggest problem the shutdown might have is if it lasts several months and hampers the overall economic recovery.
“Indirectly it might effect us in the months to come because its going to make the strength of our recovery less robust than what normally would be if our government was running things in order and we were seeing that the government was not overbearing in it’s appetite for borrowing,” Lasaga said.