A government shutdown will hit all of our pocketbooks hard
There’s plenty of talk about the short-term impact on things like small business loans, national parks, and the passport office as the government shuts down. But AM 770 KTTH and national talk show host Michael Medved says the real impacts will hit all of us where it hurts most – our pocketbook.
“I hate this whole thing, I really do,” Medved says in a conversation with AM 770 KTTH’s David Boze. “This is the beginning of a drama that could be really bad.”
The government shut down at 12:01 a.m. Tuesday after the U.S. House and Senate failed to reach a deal on a spending bill to keep funding government operations.
Medved says while a government shutdown is “sad and stupid,” the effects on the economy are where the pain will be felt, with economists predicting a downgrading of the U.S.’ credit rating, interest rates going up, and the stock market taking a sharp downturn.
“People who invest in the stock market and people who deal with that in London and around the world are not stupid people,” Medved says. “There are serious people who make their living doing this who are talking about a 3-6,000 point loss if they don’t fix this in the next two weeks.”
And that would impact anyone who has a pension plan, 401k or any other stock based investment. “It’s not just rich guys,” Medved says.
At issue is Obamacare, which takes effect Tuesday. While there’s no direct correlation, some House Republicans are demanding amendments to a spending bill to defund the Affordable Care Act. The Senate refuses to allow that, and neither side is willing to budge.
Medved says there’s no way the Republicans can win this fight, and he is calling on the GOP to give in before creating even more problems that further damage the party’s standing.
“They can’t win the thing,” he says. “The law needs to be fixed. But we need to put our arguments in the context of fixing it, delaying it, repairing it. But not wiping it out because that won’t happen.”
If the shutdown goes on for awhile, we could all see our retirement funds and other investments take significant steps back, after finally turning around in the aftermath of the financial collapse.