Apr 12, 2011

Long Government Shutdown Would Harm U.S. Economy, Hit Washington Hardest

According to the bloomberg.com report says,

An extended U.S. government shutdown would cause increasing harm to the nation’s economy, with the Washington area -- home to about 350,000 federal workers -- bearing the brunt of the damage.

“The economic damage would mount pretty quickly,” in a two- or three-week shutdown, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The longer this drags on, the greater the odds it undermines confidence more broadly.”

The direct costs of lost income to federal workers and contractors would be about $6 billion a week, said Zandi. “The dollars and cents would start to add up.”

Congressional leaders remain stalemated over funding the U.S. government, with President Barack Obama unable to broker a compromise after several White House meetings -- the most recent one last night -- with House Speaker John Boehner, an Ohio Republican, and Senate Majority Leader Harry Reid, a Nevada Democrat. The lawmakers’ staffs were continuing negotiations into the night.

In brief remarks after last night’s session with Boehner and Reid, Obama said that a shutdown could severely hamper the economic recovery and job growth.

“We’ve been working very hard over the last two years to get this economy back on its feet,” he said. “For us to go backwards because Washington couldn’t get its act together is unacceptable.”
Midnight Deadline

Failure to reach a deal on funding for the remaining six months of the fiscal year would trigger a government shutdown at midnight tonight, causing more than 800,000 “non-essential” federal workers to be furloughed without pay.

Among services that would be halted are some mortgage processing by the Federal Housing Administration and loan approvals by the Small Business Administration, while some tax refunds would be delayed. Air traffic control, emergency management and federal law enforcement would continue.

Lockheed Martin Corp. (LMT), the world’s largest defense contractor, said it would keep its factories open and pay its employees’ salaries and benefits.

read more just visit-http://www.bloomberg.com/news/2011-04-08/long-government-shutdown-would-harm-u-s-economy-hit-washington-hardest.html

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