It seems that our government can’t agree on much for too long and once again we find ourselves on the verge of a fiscal cliff. We got through it in December 2012 and we’re back at it now. There are tons of articles out there and plenty of news coverage about how and why it happened, and what it means to the world. I’d like to dispel some rumors, calm some fears and explain what it means to us as young professionals. 
How did it happen?
Our government has been unable to decide about many a thing lately, and as such, hasn’t been able to agree on a solid budget that will make both sides happy. They’ve been essentially agreeing on as little as possible, getting a temporary budget in place and kicking the can down the road. “That’s future Congress’ and America’s problem” they say. Well it once again became our problem. The new budget was due last night and things weren’t agreed upon. Namely it was the new healthcare programs that divided both parties. They couldn’t agree on it and dug their heels in. The deadline passed without a new budget and now the government is shutdown because no budget means no funding for the government.
How long will it take to get it resolved?
Well no matter which side of the political spectrum you fall on, you’re probably pretty upset right now. The only thing that people like less than the government is a shut-down government. I don’t imagine it’ll take too long. People will be up in arms; they’ll point fingers both ways. It’ll be on the news with everybody chiming in to offer their two cents. To avoid embarrassing our nation further, Congress will probably fix it quick.
What does it mean for me?
Assuming you don’t directly work for the federal government (‘vacation’!), the shutdown honestly won’t affect you a lot. Unless you’re planning on going to a National Park, applying for approval of a new drug, or going to apply for a passport, it probably won’t affect you a lot. The mail will still come, air traffic controllers will still direct flights and our servicemen will still protect our country. All non-essential government agencies will be forced to shut down but most of those don’t concern our daily lives, unless of course you had to go downtown to a federal agency for something, but let’s be honest, you didn’t really want to do that anyways. We’ll all still have to go to work and pay our taxes. Don’t expect chaos (except in the news) in the upcoming weeks, it should just be business as usual.
Some guy on TV told me to sell all my stocks.
And head for the hills? Yes, you’ll be hearing a lot about the market’s falling and how the economy is tanking. Take a deep breath. You still went to work or school today, right? The shops were still open, you still bought your lunch today (hopefully you brown bagged it though), and there was still TV on when you got home. The market goes up and down, it’s a cycle. Cause and effect though, the government shut-down so the market fell. The market has already had a great year (up 12% for the year). There’s no reason to expect a huge downturn. I’m certainly not selling my investments and cashing in my retirement.
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As a federal employee, in fact, both the wife and I are Department of the Army civilians, there is definitely a direct impact. Fortunately, we have an emergency fund in place and I receive a pension as an active duty retiree from the US Army. While we may need to make some adjustments to our expenses, particularly the longer the shutdown and furlough remain in place, we will be okay. However, I know that there are federal employees out there, at lower pay grades (that don’t make a lot of money), perhaps single parents (reliant on one income), that will be severely impacted, even if it is a short period of time. Hopefully those that denigrate federal employees realize that many are prior service – having served before becoming a civilian employee – and are good people doing important work for our country.
While it doesn’t affect me personally, its rather a shame that our politicians cannot come to some form of agreement. Statesmanship has sure dwiddled in this great nation.
Having said that, I doubt the effects will be felt that much or any time soon for that matter. Still, its an eye-opening experience to have an emergency fund and Plan B’s incase things go haywire!