By: Jerry Nix | Freewavemaker, LLC                                      Date Published: Thursday, March 13, 2025

There is a whole lot of talk going on among the soothe sayers of the main stream media about a potential US Government Shut Down by this coming Friday 03/14/2025.

What happens when there is a government shut down?

When the government shuts down, it means that Congress has not passed a funding bill to keep federal operations running. Here’s what typically happens:

• Federal Employees: Many federal workers are furloughed, meaning they are temporarily sent home without pay. Essential employees, like air traffic controllers and TSA agents, continue working but without pay until the shutdown ends. Don’t let this worry you Joe Public. This simply means that most of them will end up in the long-run with an additional “Paid Vacation” as you will learn later.
• Government Services: Non-essential services, such as national parks and museums, may close. Services like passport processing could slow down or halt. I’ve often wondered if the services are non-essential then the employees in these positions are also non-essential … so why do we spend tax dollar money on them? Frankly though, I cannot understand why national parks and museums would even be considered non-essential – but at the same time I think many of them have way too many employees for no more than they actually do.
• Economic Impact: A prolonged shutdown can disrupt the economy, affecting businesses that rely on federal contracts and delaying loans or permits. Again, my dear Public, don’t worry we have never had a prolonged shut down. The longest shut down only lasted 35 days and it really did not hurt that much as you will also learn later.
• Public Programs: Programs like food assistance or health services might face delays or reduced operations, depending on their funding sources. This also has not happened to my knowledge during any shut-down … it just could!

The effects can vary depending on the length of the shutdown and the specific agencies involved.

When the government reopens does the people who lost pay get back pay?

Remember I said above “This simply means that most of them will end up in the long-run with an additional “Paid Vacation” as you will learn later.” Check out the answer I was able to find on this one …

• Yes, in most cases, federal employees who were furloughed during a government shutdown receive back pay once the government reopens. This is because Congress typically passes a bill to authorize retroactive pay for these employees. However, contractors who work with federal agencies often don’t receive back pay, which can create financial hardship for them.

You see … most government (non-essential employees) are probably praying for at least a short-term shut down so they can take a little trip or get some things done around the house. Especially those who plan for such events by setting aside a few dollars from each paycheck knowing that it is going to happen from time to time. As for those who don’t plan on it … they’ve yet to learn that the definition of “insanity” is doing the same thing and expecting different results.

What has been the longest and shortest shut down?

Now this is going to shock many of you reading this piece.

The longest government shutdown in U.S. history lasted 35 days, from December 22, 2018, to January 25, 2019. It occurred during the Trump administration and was primarily due to disagreements over funding for a U.S.–Mexico border wall.

The shortest shutdowns lasted just a few hours. For example, in February 2018, a brief funding lapse occurred overnight but was resolved quickly when Congress passed a budget deal.

What generally happens to the stock market during a government shutdown?

Today

What happens when there is a government shut down?

When the government shuts down, it means that Congress has not passed a funding bill to keep federal operations running. Here’s what typically happens:

• Federal Employees: Many federal workers are furloughed, meaning they are temporarily sent home without pay. Essential employees, like air traffic controllers and TSA agents, continue working but without pay until the shutdown ends.
• Government Services: Non-essential services, such as national parks and museums, may close. Services like passport processing could slow down or halt.
• Economic Impact: A prolonged shutdown can disrupt the economy, affecting businesses that rely on federal contracts and delaying loans or permits.
• Public Programs: Programs like food assistance or health services might face delays or reduced operations, depending on their funding sources.

The effects can vary depending on the length of the shutdown and the specific agencies involved. Let me know if you’d like more details on any aspect!

When the government reopens does the people who lost pay get back pay?

Yes, in most cases, federal employees who were furloughed during a government shutdown receive back pay once the government reopens. This is because Congress typically passes a bill to authorize retroactive pay for these employees. However, contractors who work with federal agencies often don’t receive back pay, which can create financial hardship for them.

Let me know if you’d like me to explain more!

What has been the longest and shortest shut down?

The longest government shutdown in U.S. history lasted 35 days, from December 22, 2018, to January 25, 2019. It occurred during the Trump administration and was primarily due to disagreements over funding for a U.S.–Mexico border wall2.

The shortest shutdowns lasted just a few hours. For example, in February 2018, a brief funding lapse occurred overnight but was resolved quickly when Congress passed a budget deal3.

Shutdowns can vary greatly in impact depending on their duration. Let me know if you’d like to explore more about their effects!

What generally happens to the stock market during a government shutdown?

Government shutdowns can create uncertainty in the stock market, but their impact tends to vary depending on the duration and broader economic conditions. Historically, the stock market has shown resilience during shutdowns, with minimal long-term effects. Here’s a general overview:

• Short-Term Volatility: Markets may experience short-term fluctuations due to uncertainty, as investors react to potential economic disruptions.
• Minimal Long-Term Impact: Studies have shown that the S&P 500’s performance during shutdowns is often flat or only slightly affected. Investors generally assume that shutdowns will be resolved quickly.
• Sector-Specific Effects: Certain sectors, like defense or industries reliant on government contracts, may see more pronounced impacts.
• Recovery Post-Shutdown: Markets often rebound once the government reopens, as uncertainty diminishes.

Now what really happened to the market during this long period of 35 days shut down (even though we are warned that a Government Shut Down causes uncertainty in the markets?

Check this out …

During the 35-day government shutdown from December 22, 2018, to January 25, 2019, the stock market showed notable resilience:

• Dow Jones Industrial Average (DJIA): The DJIA gained approximately 10.3% during this period.
• S&P 500: The S&P 500 rose by about 13.3%.
• NASDAQ 100: The NASDAQ 100 experienced a significant increase of around 15.6%.

Despite the political uncertainty, the markets rebounded strongly, driven by optimism over Federal Reserve policy and corporate earnings. Personally, after losing $97,000 in the market since Trump took office on January 20^th of this year – I’m thinking about praying for a Government Shut Down. Could be the thing that would bring me back to even in the markets.

How many government shut downs have we had in the past 50 years?

Over the past 50 years, the U.S. has experienced more than 20 government shutdowns2. These range from brief funding lapses lasting only a few hours to extended shutdowns like the 35-day one in 2018–2019. Each shutdown occurred due to disagreements in Congress over federal funding. So, you see, it is something that happens more than the media wants to let you know. It is really nothing to get that worried about.

If we have a government shut down by Friday, which is what the media is currently discussing … who would be most to blame for this one; Republicans or Democrats?

The current discussions around a potential government shutdown seem to center on disagreements between Republicans and Democrats over the proposed funding bill.

House Republicans recently passed a stopgap funding bill, but it has faced strong opposition from Democrats, who argue that it includes steep spending cuts to critical areas like healthcare and veterans’ benefits. Meanwhile, some Republicans are also divided, with a few expressing dissatisfactions with the bill’s provisions.

Recent discussions about spending cuts have highlighted significant potential impacts on healthcare and veterans’ benefits:

• Veterans’ Benefits: The Department of Veterans Affairs (VA) is facing proposed cuts that could result in the loss of over 80,000 jobs nationwide. These reductions may affect healthcare services, housing options, and other critical support for veterans. Additionally, some contracts for essential services, like sterility certification for medical equipment and PTSD research, are under review for cancellation. While I am a veteran and this worries me … I don’t think it is a reason to hold things up on passing the bill. If we have too many employees in the VA perhaps losing a few (and actually 80,000 jobs could be a few as large as the VA has grown to be) may make the department run even more efficiently.
• Healthcare: Broader healthcare funding cuts could lead to reduced access to services and longer wait times for care. Specific details about healthcare cuts beyond the VA were not immediately available, but such reductions often strain public health systems. I’m sorry but I am not sure cuts will increase wait times to longer than they are now. I think the main reason for wait times is simply (a) lazy employees and (b) the medical industry “milking” the system for what they can get. I recently had a situation where I needed to have two test ran. The labs were across the hall from each other. I asked to do the test on the same day and was told, “No that’s not the way we do it here.” I found out that if the test had been done on the same day the doctor who ordered them would be paid one time. If done over two days he’d be paid twice by Medicare. More Waste, Abuse and Fraud that needs to be stopped.

These cuts are part of broader efforts to reduce government spending, but they have raised concerns about their potential impact on vulnerable populations.

Ultimately, the blame game often depends on political perspectives. Each side tends to frame the other as responsible for the impasse. Historically, both parties have used funding deadlines as leverage to push their priorities, which can lead to these standoffs. This time, however, I feel it is more the democrats than the republicans.

Should we really get overconcerned as Americans about a temporary government shut down?

The basic simple answer is NO! A temporary government shutdown can be disruptive, but it’s important to keep things in perspective. While short-term shutdowns often have limited long-term effects, they can still create real challenges for certain groups:

• Federal Employees: Workers may face financial strain if they don’t receive paychecks during the shutdown, even if back pay is later provided. Especially those who do not plan ahead for things such as this.
• Public Services: Services like national parks, passport processing, and some public health programs may be delayed, impacting daily life. However, not the daily life of the majority of Americans.
• Economic Uncertainty: Businesses that rely on federal contracts or face delays in permits may experience setbacks. Again, this is not the majority of Americans. A good business would plan for times such as this.

That said, the U.S. economy and government have proven resilient. Markets tend to recover, and essential services usually remain operational. The greater concern lies in prolonged or repeated shutdowns, which can erode public trust (if the public allows it too) and disrupt critical programs.

So, while it’s wise to stay informed, for most Americans, a temporary shutdown is usually more of an inconvenience than a crisis.

Have a good, worry free, day!

Jerry Nix | Freewavemaker, LLC