Treasury Secretary Janet Yellen has issued a stark warning about the potential consequences of a government shutdown on the US economy. Yellen stressed that such an event could push the nation into a recession, an outcome that would undoubtedly have far-reaching impacts.
Echoing her concerns, Federal Reserve Chair Jerome Powell acknowledged the risks associated with a potential shutdown, further emphasizing the potential damage that could be done to the economy. Both Yellen and Powell stressed the need to avoid this scenario in order to safeguard business and consumer confidence in the economy, as well as to protect the American people from unnecessary harm.
Yellen did not hesitate to criticize a small group of Republicans for holding a continuing resolution hostage, accusing them of causing damage to both the American people and the economy. She emphasized that their actions were detrimental to the overall well-being of the nation.
The duration of any potential shutdown will undoubtedly determine the extent of the economic damage. It is worth noting that the previous shutdown lasted over a month, causing immense strain on various sectors of the economy.
Furthermore, the White House Council of Economic Advisors has estimated that a shutdown would lead to a reduction in quarterly annualized economic growth of 0.1 to 0.2 percentage points per week. This projection highlights the potential long-term consequences that may arise from such a disruption.
In preparation for the possibility of a shutdown, the Treasury Department has begun making arrangements, with the majority of workers expected to be furloughed. This move underscores the seriousness of the situation and the urgency with which potential repercussions must be addressed.
In conclusion, the warnings from Secretary Yellen and Chairman Powell serve as a reminder of the potential havoc a government shutdown could wreak on the US economy. The economic consequences, including the possibility of recession and reduced growth, should warrant immediate attention and action from policymakers to avert any self-inflicted damage on the nation and its citizens.
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