BUSINESS + ECONOMY
Professor: shutdown has potential to impact economy
Jan 9, 2019, 2:53 PM
The U.S. Capitol dome is seen past the base of the Washington Monument just before sunrise in Washington, Saturday, Dec. 22, 2018. A partial government shutdown is in its 19th day. (AP Photo/Carolyn Kaster)
(AP Photo/Carolyn Kaster)
SALT LAKE CITY — The longer a partial government shutdown goes on, the more analysts believe politics will influence the American economy.
University of Utah Finance Professor Scott Schaeffer says it boils down to predictability.
“Firms like certainty when making investments,” he says.
DMBA Financial Planner Shane Stewart says historically, government shutdowns have been short-term. At day 19, the current partial shutdown is the second longest in US history.
“Approximately 17 percent of our whole gross domestic product is government spending,” he observes. “So government spending technically needs to happen to have our GDP survive.”
Economists say tariffs and trade wars have not worked, historically.
“All countries see that it’s a global economy and kind of rely on each other,” Stewart adds.
When President Donald Trump was elected in November 2016, the stock market soared to a new high. Zions Bank Senior Economist Robert Spendlove says the markets liked the pro-business agenda.
“Now the Trump administration is trying to address some of the really tough issues. Renegotiating trade deals is a really tough issue,” Spendlove says. “Trying to negotiate on the budget is a really tough issue.”
Spendlove says immigration reform is crucial to the US economy.
“We’ve got a huge shortage of workers in our country,” he says, pointing out that immigrants can play a helpful role in filling that gap.
Schaeffer says Utah’s economy is connected to the US economy but should be able to weather the political storm.
“The prospects for Utah remain very, very bright,” Schaeffer says.
