China and America, called the world’s superpowers, are in trouble these days. Both countries are surrounded on the economic front. While China, known as the world’s factory, is busy managing its declining economy, America faces the threat of a shutdown. Difficulties have started increasing in America. America’s economy is getting trapped in a debt crisis.
This debt crisis has become so deep that a shutdown has begun. If the problem in America increases further, even the salaries of government employees there will get stuck. America’s debt has crossed 33 trillion dollars, which remains its biggest problem.
America’s Troubles May Increase
America is facing difficulties. Difficulties for the American economy may increase. Fuel prices are high in the country, auto industry employees are on strike, and inflation is at its peak. America’s economy, which flaunts its strength in front of the world, is currently going through difficult times. Economy experts say that the possibility of recession has increased once again in the country.
America is the largest economy in the world. If it gets stuck in a recession, it can affect the world. Now, let us first understand America’s problem and what it is.
What Is America’s Shutdown, and How Will It Affect It?
The discussion about shutdown has intensified in America. If the Democrats and Republicans do not agree on a short-term spending bill by midnight on September 30, the US may go into lockdown. A shutdown is when the US government cannot provide adequate funding for agencies and government operations. However, shutdown is not a new thing for America. There have been shutdowns there many times before, also.
During the reign of Donald Trump, there was a long shutdown of 35 days. Due to this shutdown looming over America, many services will be disrupted. In this situation, American government employees will suffer the most loss. Paychecks of government employees are not sent during the shutdown.
How Will This Affect America?
If there is a shutdown in America, it will affect their economy as well. The gap between what the government spends and what it takes in, i.e., the budget deficit, increases exponentially. If there is a shutdown in America, its economy will suffer a huge loss of $6 billion weekly.
Also, US GDP may decline by up to 0.1 per cent. The threat of shutdown is looming in America at a time when the country is facing many challenges on the economic front. Inflation and interest rates are at their peak in the country, losses have become rampant, auto industry employees are on strike, and fuel prices are skyrocketing. In such a situation, the possibility of a recession in America has increased.
Problem Even In Paying Salary
Due to the government shutdown in America, the services of most government agencies will be stopped. All non-essential government employees in America will have to go on unpaid leave. According to EY analysts, there are about 800,000 non-emergency federal workers in the country whose average salary is $95,000, which will affect America’s economy.
