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The Government Shutdown: How It Impacts National Security and Your Wallet

ByArmyConnect™ Reading Time: 9 minutes

The Costly Consequences of a March Government Shutdown in 2024

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If it seems like we are always writing about a government shutdown you are correct. There are two more pay periods before our government’s leaders decide to get to work or phone it in and let our Armed Forces deal with the strategic implications, Army recruiting roadblocks and military financial hardship. That said, keep the following in mind: Article I, Section 6 of the Constitution, members of Congress “shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States (U.S. Congress 1787).” Additionally, under the 27th Amendment, “No law, varying the compensation for the services of the Senators and Representatives, shall take effect until an election of Representatives shall have intervened (U.S. National Archives and Records Administration 2024).”

Senior leaders can succeed, fail, or simply sit on their hands; they always get paid.

As the possibility of a government shutdown looms, it’s crucial to understand the potential consequences of such an event. A government shutdown is expensive, detrimental to the economy, and has far-reaching implications for national security, public perception and, as we previously covered, impacts Army Recruiting efforts. This article delves into the avoidable consequences of a March government shutdown in 2024, shedding light on its impact on various aspects of society and governance.

How Does a Government Shutdown Impose a Negative Cost on The Economy?

A government shutdown imposes a negative economic cost by disrupting federal operations and suspending various government services and programs. This disruption could decrease consumer and business confidence, leading to financial uncertainty and potential slowdowns in economic activity. The lack of pay imposes a military financial hardship that reduces spending power not only for a service member, but for that installation and host city. Additionally, the shutdown may lead to delays in federal payments to contractors and vendors, which may turn into layoffs, further impacting the overall economy.

Negative Costs of a United States Federal Government Shutdown on the Economy

  1. Disruption of Government Services: A federal government shutdown disrupts essential services provided by various agencies, impacting millions of Americans who rely on services such as national parks, IRS assistance, passport processing, and small business loans. This disruption can lead to delays, backlogs, and inefficiencies in critical government functions, hindering economic activities and affecting citizens’ daily lives.
  2. Uncertainty and Investor Confidence: A government shutdown creates uncertainty in financial markets and dampens investor confidence due to the unpredictability of political decision-making. Investors may hesitate to make investments or financial decisions, leading to market volatility, reduced consumer spending, and potential economic downturns. This uncertainty can affect business growth, job creation, and economic stability.
  3. Impact on Federal Employees and Contractors: Federal employees and contractors face financial hardships during a government shutdown, as many are furloughed or forced to work without pay. This loss of income can result in decreased consumer spending, missed bill payments, and overall economic strain on affected individuals and their families. The financial repercussions of a shutdown extend beyond federal workers to contractors, suppliers, and local businesses that rely on government contracts for revenue.
  4. Adverse Effects on Small Businesses: Small businesses dependent on government contracts, loans, permits, or regulatory approvals can suffer significant setbacks during a shutdown. Delays in government payments, service disruptions, and uncertainty surrounding federal operations can impede small business operations, growth opportunities, and access to resources vital for their success. The negative impact on small businesses can ripple through the economy, leading to job losses, reduced revenues, and long-term financial challenges.
  5. Overall Economic Burden: A federal government shutdown imposes an overall economic burden on the country, costing billions of dollars in lost productivity, reduced GDP growth, and increased government spending to mitigate the shutdown’s effects. The cumulative impact of repeated shutdowns can erode consumer confidence, weaken financial markets, strain government resources, and create instability in the broader economy. The negative costs of a federal government shutdown underscore the importance of finding timely and practical solutions to prevent economic harm and ensure the smooth functioning of government operations.
A person confidently holds a paper with a red sticker on it, symbolizing national security.

What Are the Complications and Expenses Associated with The Implementation of a Government Shutdown for The Federal Government?

Implementing a government shutdown is complex and expensive for the Federal government. It involves the layoff of government employees, the closure of national parks and museums, and the suspension of non-essential services. The administrative costs associated with the shutdown, including notifying employees, updating systems, and managing the shutdown process, also contribute to the overall expenses incurred by the government.

How Does a Government Shutdown Play into The Strategic Narrative of Adversaries and Impact National Security?

A government shutdown plays into the strategic narrative of adversaries by providing evidence to support their talking points that the U.S. is fractured, dysfunctional, distracted, and unreliable. This perception ultimately benefits adversaries, as it undermines the image of U.S. strength and stability on the global stage, potentially emboldening hostile actors and weakening diplomatic efforts.

Impact of The United States Federal Government Shutdown on America’s Top Three Adversaries and National Security

The United States federal government shutdown plays into the strategic narrative of America’s top adversaries by creating opportunities for exploitation, undermining U.S. credibility, and impacting national security across various domains. As the U.S. navigates the challenges of government dysfunction and political gridlock during a shutdown, it must remain vigilant against adversarial actions that seek to capitalize on vulnerabilities, sow discord, and challenge America’s leadership in the global security landscape.

  1. Undermining U.S. Credibility: A federal government shutdown can provide strategic adversaries like Russia, China, and Iran opportunities to undermine U.S. credibility on the global stage. These adversaries may use the shutdown as a propaganda tool to portray the U.S. as unstable, unreliable, and ineffective in governance. The perception of political dysfunction and economic instability can weaken America’s standing in international relations, potentially emboldening adversaries to challenge U.S. interests and influence in key regions.
  2. Exploiting Divisions and Vulnerabilities: Adversaries may seek to exploit divisions within the U.S. government and society exposed during a shutdown to sow discord, amplify internal strife, and exploit vulnerabilities in national security. By capitalizing on the chaos and uncertainty created by a shutdown, adversaries can advance their strategic objectives, such as cyber espionage and disinformation campaigns, and influence operations to weaken U.S. alliances and undermine democratic institutions.
  3. Impact on Military Readiness and Operations: A federal government shutdown can affect national security by affecting military readiness, training, and operational capabilities. The disruption in funding, support services, and personnel management can hamper military operations, maintenance of equipment, and deployment readiness. Adversaries may perceive a weakened U.S. military posture during a shutdown as an opportunity to test boundaries, escalate tensions, or challenge U.S. interests in regions of strategic significance.
  4. Deterioration of Intelligence Sharing and Cooperation: The shutdown can also impact intelligence sharing and cooperation with allies and partners, creating gaps in information sharing, joint operations, and coordinated responses to shared security threats. Adversaries may seek to exploit these gaps by advancing their intelligence collection efforts, conducting covert activities, or pursuing aggressive actions that exploit the absence of robust U.S.-led security partnerships during government dysfunction.
  5. Compromising Homeland Security and Border Protection: The shutdown may compromise homeland security measures, border protection efforts, and immigration enforcement, allowing adversaries to exploit vulnerabilities in U.S. borders, critical infrastructure, and cyber networks. Adversaries could capitalize on the diversion of resources, personnel shortages, and operational disruptions resulting from the shutdown to launch cyberattacks, smuggling operations, or other illicit activities that threaten national security and public safety.

What Are the Implications for Soldiers and Government Civilians During a Government Shutdown?

During a government shutdown, soldiers will work without pay, placing an undue financial burden on them and their families. Conversely, government agencies may send civilians home, leading to financial strain and uncertainty. While many government civilians may eventually receive back pay after the shutdown ends, the disruption and economic hardship during the shutdown period can be frustrating for Americans.

Implications for Military Members and Their Families During a United States Federal Government Shutdown

Navigating the implications of a federal government shutdown poses unique challenges for military members and their families. It requires resilience, adaptability, and community support to mitigate the impacts on financial security, emotional well-being, and operational readiness within the military community.

  1. Delayed Paychecks: A federal government shutdown can result in delayed paychecks for military members, impacting their financial stability and ability to meet essential expenses. The uncertainty surrounding when and if service members will receive the pay can create significant stress and anxiety for service members and their families, affecting morale and overall well-being.
    • When we speak of military financial hardship, we reference a 2020 poll that discovered that “68 percent living paycheck-to-paycheck at least every other month and a majority (54 percent) doing so every month (Online Lenders Alliance 2020).”
    • The U.S. Census Bureau ranks service members in the top 10 nationally, with a divorce rate of almost 18% for couples under 30 years old (Morris 2021).”
    • Last, according to a Forbes poll, 24% of marriages end in divorce due to financial stress (Ramirez 2023). Add a federal shutdown to all three points, and we can see the divorce courts remaining full for the foreseeable future.
  2. Disruption of Benefits and Support Services: Military families may experience disruptions in benefits and support services provided by government agencies during a shutdown. Services such as healthcare, housing assistance, childcare, and counseling may be affected, leading to challenges in accessing essential resources and support systems that contribute to the welfare of military families.
  3. Impact on Deployment and Training: The shutdown can disrupt deployment schedules, training exercises, and readiness activities for military units, affecting operational capabilities and mission preparedness. Military members may face uncertainties regarding mission assignments, training opportunities, and career advancement due to the disruption in funding and operational support during a shutdown.
  4. Emotional and Psychological Strain: The prolonged uncertainty and financial strain caused by a government shutdown can take a toll on the mental health and well-being of military members and their families. The stress of navigating financial challenges, disruptions in services, and uncertainties about the future can lead to increased anxiety, depression, and emotional strain within military households.
  5. Community Support and Resilience: Despite the challenges posed by a government shutdown, military members and their families often demonstrate remarkable resilience and solidarity within their communities. Mutual support networks, charitable organizations, and military community resources are crucial in providing assistance, guidance, and solidarity during financial hardship and uncertainty caused by a shutdown.
  6. Operational Readiness Concerns: The impact of a government shutdown on military readiness, maintenance of equipment, training exercises, and deployment operations can have broader implications for national security and defense capabilities. The disruption in funding, logistical support, and operational planning may affect the ability of military units to respond to emerging threats, conduct missions effectively, and safeguard U.S. interests at home and abroad.

Military Financial Hardship, A Lack of Confidence, and a National Security Fiasco

March 2024 is closer than we think, as are the far-reaching, impactful, avoidable consequences of a government shutdown. From its negative cost on the economy to its implications for national security and public perception, a government shutdown can have significant repercussions. As the nation faces the possibility of a shutdown, stakeholders must work towards finding viable solutions to avoid these costly consequences and maintain the stability and functionality of the government and economy.

We thank every service member and their families for their patience and service to a country in a self-made crisis.

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