The shutdown of Donald Trump will soon cost more than his wall

    The shutdown of Donald Trump will soon cost more than his wall


    After more than three weeks of the partial shutdown of the federal state, a growing number of experts warn against the non-negligible cost of the current standoff between Republicans and Democrats, and which suffer American companies and consumers.

    The image has been talking about social networks: Monday, the US president paid for a general tour of hamburgers and other fast food to players of the American football team Clemson Tigers, received at the House -Blanche. "This is because of the shutdown," said the US president, adding that this "great American food" was better than "all we could have offered them", the majority of the staff of the sanctuary of the US presidency is in left. Behind this incongruous image hangs a reality more and more sensitive: for nearly four weeks, the longest "shutdown" in history affects a growing number of activities, people, federal agencies, and touches both the daily life of citizens but also the economy across the Atlantic as a whole. Slowdown or even interruption of mandatory administrative procedures, uncertainty affecting consumer confidence, lack of pay for hundreds of thousands of workers ... As the days go by, the bill goes on for the private sector.

    Friday, a note published by Standard & Poors came to quantify the crisis. According to the rating agency, "the US economy will have lost $ 3.6 billion on Friday, January 11" and the cost of "shutdown" will even exceed in two weeks the amount requested by Donald Trump to build his wall to the Mexican border, or 5.7 billion. Although still distant, this disaster scenario is not implausible: at present, the negotiations remain at a standstill, and the US president has threatened to block the situation "months, even years". Specifically, the agency notes that the government's paralysis could weigh "$ 1.2 billion" each week, a negligible weight compared to the wealth produced each year by the US economy, but with massive consequences for "private" households payroll. The note also regrets the "lost productivity" and the "direct costs" that will plague the US economy as the weeks unfold.

    Another agency closely scrutinized by analysts, Moody's pointed out, a few days earlier, that the decision of the federal government has "a negative effect on the US economy," without affecting - for now - it's rating. Moody's cites the example of indebtedness and recalls that the longer the "shutdown" lasts, the more it will have an influence on the loans provided by the state, consumer spending, the ability to honor public contracts and, in general, the activity of the private sector. According to estimates by the agency, the current situation could strain the wealth created this year by the United States of $ 8.7 billion at the end of January. In the case of prolongation, the crisis could lead to an "adverse reaction of the financial markets". Activities and sectors that are more dependent on the public sector, such as subcontractors in the defense sector, the State Department, works or public transport, are already experiencing the concrete consequences of the "shutdown". The agency cites the example of the New Jersey Transit Corporation, which sees its funding capacity affected directly because of its reliance on public funding.
    For now, the total cost divides experts, who range from $ 1.2 billion a week, according to Standard and Poors, to $ 2 billion a week, according to Wells Fargo Bank. At the end of the week, US Treasury Chief Jerome Powell stepped out of his reserve to comment on the current situation: "If we have a long-term shutdown, I think it will become clear in the economic data," he explained. The head of the institution has notably recalled that the closure of federal agencies, including the Office of Economic Analysis, will prevent the publication of vital information for the private sector, providing an additional vagueness in an already complex situation. The Fed has asked the banks to be lenient with their customers affected by the blockage, for example in the area of credit repayment.

    Complete blocking, no issue in sight

    Taken in a strategy of uncompromising confrontation, the two parties in Congress have failed to agree for more than 24 days on the US budget. There has been no sign of appeasement in recent days: Donald Trump claims to do "exactly what [he] has promised to do, and why [he] was elected", saying "fighting for [the US citizens]. " Opposite, led by Nancy Pelosi, the Democrats explain that the occupier of the White House does not make any effort. If neither side gives in, a third option could come from the Republican elected, who, under popular pressure, may decide to establish an agreement with their counterparts Democrats to end the blockage.

    If the majority of elected officials close the ranks, cracks appear and some begin to ask for a change of position, the opposition assumed the bipartisan negotiation. This is particularly the case of West Virginia Senator Shelley Moore Capito, for whom both parties "must reach an agreement that will reopen the government while strengthening our borders." South Carolina Conservative Lindsey Graham wants temporary government funding for three weeks, giving both sides time to negotiate while easing taxpayers and the US economy from a "shutdown" that has become too heavy.

    However, the discussions are sporting: the young Democratic guard remains firmly on its positions, as its elder's Republicans. A newcomer to the House of Representatives, Democrat Alexandria Ocasio-Cortez called on her fellow men to "not give an inch of ground" to the Republicans, on pain of seeing Donald Trump use the paralysis of the government as a means of pressure to obtain additional concessions.
    W.M
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    writer and blogger, founder of ARREADAH - Latest news and headlines from all around the world. .

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