The Government Shutdown Won't Cause a Recession

Townhall | 1/20/2019 | Staff
jollyjetta (Posted by) Level 3
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Why are Democrats opposing Americans in every way?

News article after news article is predicting the federal government partial shutdown will lead to economic hardship. That economic growth will slow in both the public and private sector. But despite all the doom and gloom mentioned in the media, the measure that counts most in predicting the future, the stock market as actually improved significantly since the shutdown started.

Headline - Thursday - Politico - Recession - Warnings

A headline on Thursday in Politico claimed: “Recession warnings pile up as shutdown wraps up fourth week.” The New York Times, CNBC, Yahoo News , and newspapers across the country have all had similar stories. Jamie Dimon, the CEO of J.P. Morgan Chase, caused shockwaves this week when he asserted that the shutdown could reduce economic growth to zero during the first quarter of the year. His comments got massive news attention.

There are real costs to the shutdown. Some companies can’t even operate now because they are so dependent on government regulation. For example, breweries need the Alcohol and Tobacco Tax and Trade Bureau to approve new labels. Currently, around half of all U.S. breweries are waiting for label approval.

Standard - Poors - Global - Ratings - Couple

Standard & Poors Global Ratings claims that in the next couple of weeks, the impact on the economy from the shutdown will exceed the $5.7 billion cost of a southern border wall. Others are shaving over three tenths of a percentage point in economic GDP growth.

But investors don’t see a looming crisis. On December 21st, the day before the shutdown, the total value of the 5,000 U.S. stocks equaled almost $31.5 trillion. As of Tuesday, January 15th, those stocks were worth $34.2 trillion —an 8.5% or $2.7 trillion increase in value.

Weeks - Work

Not bad for a few weeks’ work.

Nor is it just the overall value of the stock market that has risen. Well-known indexes with a...
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