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What makes this US shutdown different (and more difficult)

WikiFX
| 2025-10-06 14:39

Abstract:Shutdowns fights have become increasingly common but in a polarised Washington, both sides see merit in digging in.

Meanwhile, Schumer levelled the same accusation at the other side, saying that a Republican promise to discuss healthcare subsidies once the government reopens can not be taken seriously.

Trump himself has inflamed the situation by posting a controversial AI-generated image of Schumer and the top Democrat in the House, Hakeem Jeffries, in which Jeffries is depicted with a large Mexican-style sombrero and a moustache.

Jeffries and other Democrats called this racist, which was denied by Vice-President JD Vance.

Analysts expect about 40% of the federal workforce - more than 800,000 people - to be put on unpaid leave as a result of the shutdown.

That will depress spending - and also have wider ramifications, as environmental permitting, patent approvals, payments to contractors and other kinds of government activity tied to business comes to a halt.

A shutdown also injects new uncertainty into an economy already being roiled by changes ranging from tariffs, earlier cuts to government spending, immigration raids and artificial intelligence.

  • Trumps Grim Reaper - from Project 2025 to shutdown enforcer
  • How the US government shutdown can impact travel

Analysts estimate that it could shave as much as 0.2 percentage points off US economic growth for each week it lasts.

But the economy typically recoups most of that lost activity after a shutdown ends, as it would after disruption caused by a natural disaster.

That could be one reason why the stock market has appeared largely unfazed by the current stand-off.

On the other hand, analysts say that if Trump carries out his threat of mass firings, the damage could be more long-lasting.

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