WSJ: Last-Minute Cancellation of Trump’s Nvidia Chip Deal with China
The US government entered its latest shutdown at 12:01 a.m. on Wednesday. This occurred after lawmakers failed to reach an agreement on a last-minute funding bill. This marks the 11th government shutdown in US history.
Historical Context of Government Shutdowns
Since 1976, there have been 20 instances of government funding gaps. Not all of these resulted in a complete shutdown, as many were resolved without halting operations. However, a stricter interpretation of funding rules beginning in the early 1980s led to an increase in the number of shutdowns.
- Before the 1980s: Funding gaps typically had minimal impact on government functions.
- After the 1980s: Many funding gaps resulted in agency shutdowns unless quickly resolved.
Implications of the Current Shutdown
The duration of the current shutdown remains uncertain. It will persist until Congress successfully passes a funding bill, likely through a “continuing resolution.” This approach has historically resolved shutdowns since 1990.
Previous Shutdowns and Economic Impact
The most recent shutdown, which began in December 2018, holds the record for the longest in history, lasting 34 days. This event had significant economic repercussions:
- GDP Loss: Approximately $3 billion in GDP was lost in the fourth quarter of 2018.
- Delayed Spending: About $18 billion in federal discretionary spending was impacted over the shutdown period.
As the situation unfolds, experts suggest that the current funding gap may extend beyond a few days. The increasing length of shutdowns in recent years indicates a potential for continued economic disruptions.
