How The Record 35-Day Government Shutdown Destroyed American Lives

Although the federal government is officially re-opened, temporarily, the US economy is still facing headwinds from multiple sources. These include trade wars, rising interest rates, and excessive government and corporate debt.

But on the domestic front, what’s impacting up to 800,000 Americans right now, some quite severely, and causing fear among investors is the longest recorded government shutdown, 35 days. 

Here’s how various segments of American society have been affected by the government’s failure to come to terms with itself.

Several Renters Are Now Facing Eviction

Not all Americans are fortunate enough to live without depending on rental subsidies to help keep a roof over their heads. 

With the USDA housing assistance on a standstill, many renters are were required to pay the full amount of their rent lest they face eviction.

Many renters relying on federal assistance received letters from their property managers, all stating a similar message like this one:

“Until the government opens again, you are responsible for ALL of your rental amount.” 

So, in addition to the financial stress experienced by hundreds of thousands of furloughed federal employees, low-income households, many among them seniors and disabled persons, and numbering in the tens of thousands, have begun to lose their federal assistance.

USDA housing assistance programs are not the only ones hit. HUD is also experiencing difficulties in renewing its contracts with private landlords. And about 1.4 million households are supported by project-based affordable housing.

Fortunately, we have reopened the government because the USDA’s food stamps program was only guaranteed through February. If Democrats don't negotiate this constitutes a double-whammy and serious threat to low-income families, as they face the possibilities of losing both housing and food assistance.

Another tragic prospect is that many furloughed federal workers, most of whom had no previous need for food assistance, found themselves for the first time in need of government assistance. And through it all, they were still expected to go to work...but without a guaranteed paycheck in sight.

Farmers Face a Double Whammy with Tariffs and Shutdown

Brad Kremer, a Wisconsin farmer, approached Sen. Ron Johnson to tell him of the tens of thousands he had lost due to the tariffs. 

Johnson, a GOP lawmaker, sent President Trump a letter, stating how Trump’s protectionist policies are hurting farmers and local businesses.

Six months later, Kremer’s problems only got worse. With the tariffs still in place, the partial government shutdown now disrupted the very aid programs that were implemented to help counter the negative effects brought forth by the tariffs.

Kremer is not the only farmer devastated by this dual infliction. Farmers across America are being severely impacted to various degrees of severity.

With the Department of Agriculture partially closed, Trump’s $12 Billion bail-out package designed to help farmers get through the trade war couldn't be accessed or distributed.

There simply was no federal aid check coming until the department was fully up and running. Farmers couldn’t even gain access to a federal agricultural program for low-interest credit. 

Many farmers rely on this program in which their crops are put up as collateral before sales and repayments. With the offices closed, farmers struggled to market their crops.

In addition to this, government data on business and agricultural conditions have also dwindled over the weeks, making it difficult for farmers to plan for months ahead with regard to planting and marketing their product.

Federal Workers Are Pulling Money Out of Their Retirement Accounts

Most importantly, let’s take a look at what happened to the federal workers themselves. 

Financial pressures increased to the point where workers have pulled money out of retirement to cover their day-to-day expenses.

According to the Federal Retirement Thrift Investment Board, there has been a 34% jump in hardship withdrawals. Most of the outflows are coming from investment funds managed by BlackRock Inc.

In short, the hardship withdrawals, in addition to new loans that many federal workers begun to take out, are being used to compensate for missed paychecks.

Government’s Agenda at the Expense of the People They Serve

As tragic as these cases may be, each one demonstrates a significant reliance on government either due to unfortunate circumstances, poor decisions, coercive intrusions (on government’s part), or choice.

Should the government be trusted? To a reasonable extent, yes. But “can” government be trusted? We’re not going to answer that, but it’s hard to find any compelling reason that isn’t tainted with a blind ideological sentiment to say “yes.” 

Can or should citizens “hedge” the unknown amidst this domestically political and geopolitical mess? Of course. And that begins by re-claiming a bit of independence: in thought, action, and a renewed looks at what constitutes sound money.