US Economy Bleeds $14B as Government Shutdown Grinds On - Crypto Markets Watch Closely
Washington's political circus triggers massive economic hemorrhage
The stalemate on Capitol Hill isn't just political theater—it's costing real money. While politicians posture, the US economy takes a $14 billion hit that's sending shockwaves through traditional markets.
Digital assets stand ready as traditional finance falters
As government dysfunction paralyzes legacy systems, savvy investors are turning to decentralized alternatives. Bitcoin and Ethereum trading volumes spike during traditional market uncertainty—because code doesn't shut down over budget disputes.
Another reminder why we need systems that can't be turned off by political squabbles. The old guard's failure is crypto's validation—at least blockchain doesn't take taxpayer-funded vacations.
Lawmakers deadlocked as losses mount
And in Washington, lawmakers are mired in a partisan standoff. Senate Republicans were seeking a stopgap spending measure to reopen federal agencies through Nov. 21, in hopes of buying themselves several more weeks of bargaining room. But Democrats are cautioning that any deal also needs to extend the critical Affordable Care Act tax credits for those who can’t afford health insurance.
The impasse is a symptom of deeper political polarization over what the government should and shouldn’t spend money on, how it should deliver social programs — a divide that nativists in Trump’s camp have used to sabotage budget negotiations for years.
The WHITE House is urging Congress to send it a “clean” continuing resolution, one free of policy riders, despite lawmakers’ deep divisions over the nation’s air travel safety and other issues. The White House explains that further gridlock would not only harm workers but also potentially damage the broader economy.
The longer the shutdown continues, the more lasting its effects will be, the CBO said. Even if the shutdown were to be resolved immediately, the economy would suffer an estimated loss of around $7 billion in GDP. A six-week shutdown would increase the cumulative deficit to $11 billion, and an impasse lasting eight weeks would raise total losses to $14 billion, with the majority of these losses being permanent.
Ripple effects spreading beyond Washington
The impacts are national, not just in terms of numbers. Federal loan programs designed to help small farmers, students, and businesses have been placed on hold. Federal money for scientific research is frozen. Meanwhile, at airports across the country, longer lines are fraying travelers’ nerves, and warnings of security disruption have heightened tensions as unpaid workers with the Transportation Security Administration (TSA) call out sick.
Each side has stated that it is willing to return to the table, but little compromise is in sight. Mike Johnson, the Speaker of the House, has insisted that spending cuts and reforms be included in any new allocation. Yet Democratic leaders argue that the government should not be held hostage to political wars.
Kevin Hassett, former economic advisor to Donald Trump, said Monday that the government shutdown is “likely to end sometime this week.” Speaking to CNBC, he added that “there’s a shot that this week, things will come together, and very quickly,” as the shutdown enters its third week without a deal.
Speaking on Squawk Box, Kevin said the TRUMP White House is already preparing backup plans in case the standoff drags on. “If it doesn’t,” he warned, “the White House is going to have to look very closely, along with [budget chief Russell] Vought, at stronger measures that we could take to bring them to the table.”
Still, pressure is mounting from business leaders, economists, and ordinary Americans for a solution, as the holiday season approaches and no end in sight.
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