Core Points - The article discusses the economic implications of government shutdowns in the U.S., highlighting that each week of shutdown results in a loss of $15 billion in GDP, equating to a loss of $45 per person [3][5] - The article emphasizes the tangible consequences of shutdowns, including the impact on federal employees and essential services, which can lead to significant disruptions in various sectors [5][7] - The potential for a political standoff to escalate into a broader economic crisis is underscored, with concerns that the Federal Reserve may be forced to intervene if the situation persists [9][11] Economic Impact - Each week of government shutdown results in a GDP loss of $15 billion, which is a significant increase compared to previous shutdowns [3] - The 2018-2019 shutdown lasted 35 days and resulted in a total loss of $11 billion, with $3 billion being permanent losses [3][5] - The current shutdown's rapid financial impact raises alarms about the long-term economic consequences [3][5] Federal Workforce and Services - Approximately 750,000 federal employees are affected by shutdowns, leading to unpaid leave and operational disruptions in critical agencies like the SEC and FDA [5][7] - The article notes that the financial regulatory system is severely compromised during shutdowns, with only a skeleton crew remaining to manage essential functions [5][7] Federal Reserve Response - Historical precedents show that the Federal Reserve typically responds to shutdowns with caution, often issuing warnings before taking action [9] - The article suggests that if the shutdown continues, the Fed may be compelled to lower interest rates, but this would not address the underlying fiscal issues caused by the shutdown [9][11] Public Sentiment and Political Dynamics - There is a growing concern that the public may become desensitized to the recurring nature of government shutdowns, which could have long-term implications for voter sentiment [11] - The article posits that the ongoing political struggle is detrimental to the economy, with the potential for significant job losses and economic instability [7][11]