June 20, 2019

Prolonged shutdown may cost more than wall Trump asked for

The federal government has been partially shut down already for 22 days as of Saturday, with Senate Democrats still refusing to agree to Trump’s requested $5.7 billion in funding to build the wall without which he claims the country is not safe.

It appears that it would have been cheaper to cave in to the US leader’s demands for border security at once, as the national economy’s losses already amount to more than 60 percent of the debated sum and will also exceed it soon, the analysis by Standard Poor’s Global Ratings shows.

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“It will only take another two weeks to cost the US economy more than the $5.7 billion that the White House requested,” Ann Bovino, SP’s chief US economist, said in a note on Friday as cited by media. The analyst added that each week of partly non-functioning government shaves nearly $1.2 billion off real GDP, already costing the US some $3.6 billion.

“That may seem like pennies for the world’s biggest economy, but it means a lot to those workers trying to cover their household costs without their paychecks.”

Some financial services companies offered even gloomier estimates given that around 800,000 federal workers are not being paid and there can be a potential delay in tax refunds. Thus the federal closure costs up to $2 billion per week, according to Wells Fargo retail analysts cited by CNBC. The company also warned that retailers may also feel the bite from lower consumer spending because of the shutdown.

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Jerome Powell, who heads the Federal Reserve, warned of potentially damaging effects for the national economy as he appeared at The Economic Club of Washington, DC on Thursday.

Earlier this week Trump vowed to invoke emergency powers to get the wall built without Congressional support, but later cooled his tone, calling to pass a bill that “ends the crisis” at the border with Mexico. 

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Article source: https://www.rt.com/business/448651-record-shutdown-trump-wall/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

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