US Economy Could Be Cut in Half if Shutdown Drags On, Treasury Secretary Warns
The warning coming out of Washington right now is blunt: if
the federal government shutdown keeps dragging on, the country’s economic
growth could be slashed by half. That’s not speculation from outside analysts —
that’s straight from US Treasury Secretary Scott Bessent.
In an interview with ABC News, Bessent didn’t sugarcoat a
thing. He said the hit to the economy started “from day one” of the shutdown
and has only been getting worse. He pointed to what he described as two strong
quarters under President Trump, then contrasted it with the current stall.
According to him, early estimates show that economic growth for this quarter
could be cut by 50 percent if lawmakers don’t resolve the standoff.
The shutdown began at midnight on October 1 after funding
ran out. Republicans and Democrats failed to reach a deal on several spending
priorities, most notably healthcare. Since then, large parts of the federal
government have been operating at a crawl or not at all. Both sides are blaming
each other — Republicans say Democrats are blocking essential funding, while
Democrats accuse Republicans of manufacturing a crisis for political advantage.
So far, no compromise is in sight.
To understand the scale of this moment, it helps to look
back. Since 1977, the US has experienced more than 20 shutdowns caused by
disagreements between Congress and the White House. Some lasted hours, others
lasted weeks. But the current one has already broken the record for the longest
government shutdown in American history, surpassing the 2018–2019 shutdown
during Trump’s first term.
The deeper the shutdown goes, the wider the ripple effect
becomes. Federal workers are missing paychecks. Agencies handling everything
from food safety inspections to housing assistance are either slowed or frozen.
Tourism, federal contracts, small business loans — they all take a hit.
Investors start getting jittery. Consumer confidence dips. And now, according
to Bessent, the impact is big enough that this quarter’s economic growth could
be chopped in half.
What this really means is that the shutdown is no longer
just about politics in Washington — it’s creeping into the daily lives and
wallets of millions of Americans. And unless Congress finds common ground soon,
the economic fallout could quickly become the story of the year.
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