The Federal Government Shutdown Effects on Economy
Submitted by
Ramona Rhodes

Prepared for
Dr. Sina
Finance 5000
Summer 2014
Webster University

July 12, 2014

CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

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ABSTRACT
This paper will discuss the effects the federal government shutdown had on the civil service household, thus the economy. Although some statistics will show it as a small percentage of the total employment, it was enough to halt paychecks, goods, services and programs. That is enough to have government workers curtail their spending and perhaps alter it, because of the perception of what the government shutdown will do even in the future. The perception spills over into the private sector and starts to affect the economy as a whole. Thus, the GDP will be examined in this paper. The federal government shutdown will be examined from the broad impact to the personal impact, which all of it affects the financial market.

The federal government shutdown October 1, 2013 and it lasted through October 17, 2013. Primarily, this happened because of more political reasons than anything else. There was a standoff in congress between the Republican and the Democratic Party. Actually, the federal government shutdown does not directly affect the stock market or bonds. However, it does have an impact. The shutdown was considered a gap in funding by the government. This gap impacted the economy in a big way. Just the thought of a federal government shutdown sent panic to the whole economy. People started reacting, without the realization that it was not going to be as critical for each household as they thought. Mainly the federal government workers were affected. Pointedly...

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