Government Shutdown Could Have Wide-ranging Effects

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It is not only the 800,000 federal workers who will suffer financially as a result of a government shutdown. Amongst those eagerly waiting to know whether Congress can agree on a budget deal are manufacturing managers whose firms supply merchandise to federal agencies, analysts at Wall Street who rely on data from government sources and bank mortgage loan officers who get mortgages guaranteed from the Federal Housing Administration. After all, the federal government is a huge business and, as President Barack Obama has warned, pulling the plug temporarily could disrupt several other businesses and slow down the already weak economic recovery. Economists, however, are divided over the extent to which the shutdown could affect the economy and argue that the effects will depend very much on how long the stoppage lasts.