I have been discussing the possibility of a January 19th “government shutdown” with my clients since mid-December. My original odds were 50/50 and have stayed there since the beginning of this week. As both parties began to dig in and work on the blame game, the odds of a “shutdown” have increased. That’s pretty obvious. Washington is dysfunctional and party politics “trump” (pun intended) what is good for the country and its citizens.


So what if the government shuts down? In Washington there is a sense that a shutdown would be an epic event. But, really for most of us, a short term shutdown, will have little or no impact on our lives or negatively impact the country. In fact there have been 18 shutdowns since 1976. The most recent was Oct. 1, 2013 and lasted 16 days. Anyone remember that? Probably not.


So as Washington and news organizations create the “noise”, the reality is that much of government will keep operating:


  • People still get their Social Security check
  • Air Traffic Controllers and TSA screeners continue to work
  • FEMA would react to natural disasters
  • Federal prisons and VA hospitals are not affected
  • Mail gets delivered
  • Military readiness is not affected


That’s a partial list of what is not affected.


A lengthy shutdown, several weeks or more is a different story and could have an impact on consumer and market confidence.


So, will there be a shutdown at midnight? I believe the chances of the Senate passing the Ryan House Bill are less than 50%. The market doesn’t seem worried at this point and the market futures indicated a positive market open this morning.


While a protracted shutdown could have negative impact on the economy, a short term shutdown is not a “big deal.”