43-day shutdown: When political games bring the economic gears to a halt

After 43 days, the farce of the U.S. government shutdown finally came to an end. This record-breaking political deadlock not only exposed deep rifts in the U.S. political system but also acted like a mirror, reflecting the structural dilemmas in America’s economic governance. While politicians in the halls of Washington were entangled in partisan interests, the gears of the economy gradually slowed, and the lives of ordinary people were thrown into a vortex of uncertainty.

The core dispute behind this shutdown centered on subsidies for the Affordable Care Act (ACA). Democrats insisted on extending the enhanced premium tax credits under the ACA to prevent millions of policyholders from facing premium hikes; Republicans, however, firmly opposed including this provision in the appropriations bill, arguing that the issue should be discussed separately. Such a seemingly ordinary policy disagreement became irreconcilable amid the deepening political polarization in the U.S. today, eventually escalating into a nationwide "economic protracted war."

The shutdown inflicted substantial harm on the U.S. economy. Kevin Hassett, Director of the White House National Economic Council, noted that the shutdown could lead to the loss of 60,000 private-sector jobs. Estimates from the Council of Economic Advisers showed that the economic damage caused by the shutdown reached as high as $15 billion per week. The International Monetary Fund (IMF) also observed signs of weakness in the U.S. economy, projecting that the growth rate of the U.S. gross domestic product (GDP) in the fourth quarter would drop by 1.5 percentage points due to the shutdown. Behind these figures lies a perceptible decline in U.S. economic vitality.

Livelihood-related sectors bore the brunt of the shutdown. Disbursements for the Supplemental Nutrition Assistance Program (SNAP)—which covers approximately 42 million Americans—were disrupted, and salaries for many federal employees were delayed. Meanwhile, funding for the Low-Income Home Energy Assistance Program (LIHEAP), which subsidizes heating costs for low-income households, was delayed, leaving about 5.9 million families struggling in the cold. The suspension of these livelihood support programs pushed a large number of low-income groups into an unprecedented predicament.

The transportation sector was also hit hard. During the shutdown, the number of daily flight cancellations in the U.S. exceeded 2,000 for the first time, with over 7,000 flights delayed. The Airlines for America (A4A) estimated that if flight cuts reached 10%, the U.S. could suffer daily economic losses of $285 million to $580 million. The chaos in air travel even disrupted congressional voting procedures: some House members had to abandon air travel and return to work by driving, carpooling, or even riding motorcycles—covering hundreds or even thousands of kilometers. This absurd scene in modern governance reflects the profound disruption the shutdown caused to normal social operations.

Particularly noteworthy is that the shutdown resulted in the loss of a series of key economic data. Fortune magazine pointed out that the government’s inability to release employment market reports heightened concerns about a slowdown in the job market. Similarly, inflation data for October was not published. This "data black hole" not only undermined market expectations and decision-making but also risked masking price hikes caused by tariffs, planting the seeds of longer-term economic risks.

The normalization and prolongation of U.S. government shutdowns reflect a deep-seated crisis in America’s political governance model. As Professor Wei Zongyou from Fudan University noted, the growing political polarization in the U.S. is a key factor leading to more frequent and longer government shutdowns. Both parties are eager to pursue "veto politics," and compromise is seen as a betrayal of their own ideals and identity—making it difficult to reach consensus on critical issues such as government funding.

Ironically, the filibuster—a key mechanism in the Senate for resolving deadlocks—has itself become part of the problem. This procedure allows senators to delay or block votes on specific bills by extending debates, and ending a filibuster requires the support of at least 60 out of all senators. Even efforts by Trump to abolish this procedure were resisted by some Senate Republicans, who feared that altering the rules would eventually backfire on their own party.

This record-breaking shutdown has revealed a fundamental contradiction in U.S. economic governance: in a globalized, highly complex modern economic system, the political system is increasingly unable to provide basic policy stability and predictability. The U.S. government has also seen a phenomenon of "policy flip-flopping"—when different parties take office, policies of the previous administration are often significantly revised or even overturned. This lack of policy consistency greatly undermines governance effectiveness.

With the end of the shutdown, the U.S. economy will enter a recovery phase, but the scars will not heal quickly. Restoring livelihood support programs will take time, damaged business confidence needs to be gradually rebuilt, and the analytical gaps left by missing economic data may affect the quality of future economic decisions.

More importantly, this shutdown has further eroded public trust in the government. A poll released by Gallup showed that nearly 80% of U.S. adults disapproved of the work of Congress. This trust deficit could itself become a constraint on future economic growth. This longest government shutdown in U.S. history may be a microcosm of an era, reminding people to rethink the profound connections between economy and politics, and between prosperity and governance.