I thought I would dust this old blog off and repost since there is a possibility of another government shutdown. The last time the government shutdown was way back in January of this year (please note the sarcasm).
This isn’t because we ran out of money again. This one will be caused by the president and congress squabbling over an immigration bill. I’m not even sure if you’re allowed to shutdown the government over this but anything is possible with this administration.
Regardless of the reason, if a shutdown occurs, the federal government will cease all but essential services until someone tells them to get back to work.
Here’s a quick synopsis of what this means for you and me:
Non-essential government employees are furloughed, meaning they are told to not report to work. These employees include the Internal Revenue Service and Centers for Disease Control and Prevention among many others.
Mail will still be delivered, and airports will operate as normal. The military will not shut down—it is considered an essential function, so all active duty members will work as usual.
Medicaid and Medicare will continue to insure senior, low-income and disabled people during the shutdown.
A government shutdown costs an estimated $2 billion in economic output daily. If this happens again, I think stocks will take a dip initially. Then, once they come to an agreement and everyone comes back to work, the markets will recover. So, if you’re worried about the shutdown hurting your investments, don’t. Unless you need that money in the next couple of months, it will be easier for you to stay invested than selling and trying to time the market to get back in.
Please let me know if you have any questions.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
