Government Shutdown 2025 — What It Means for Your Money

The federal government has shut down because the politicians could not come to an agreement and pass a funding bill. On this channel, we focus on money-related aspects, so we're just going to stick to that topic when covering this government shutdown. But later in this video, I'm going to be covering what the politicians are arguing about, which is important to this discussion because we want to get a sense of how long the situation is going to go on for. Now, let's begin here. What gets shut down in a federal government shutdown? Essential services will continue. Programs like Social Security, Medicare, Medicaid, VA benefits remain funded. TSA is still going to be working. Federal courts are still going. But there's going to be things and services that will be closed. So we're talking about certain national parks, the SBA, and economic data collection and reports. Now, this is very important because the jobs reports are released the first Friday of each month. So the jobs reports were scheduled to be released tomorrow on Friday, October 3rd. However, because of the shutdown, the jobs report is going to be delayed until who knows when. The Department of Labor actually came up with a contingency plan in the event of a shutdown. Now, I want to show it to you. So here's what it says on page 9 of the plan. Agency activities that will cease during a lapse. The Bureau of Labor Statistics of the BLS will suspend all operations. Economic data that are scheduled to be released during the lapse will not be released. All active data collection activities for BLS surveys will cease. So basically in a nutshell, the jobs reports is going to be delayed. Now, the CPI inflation report was scheduled to be released on October 15th, but this one too. So this report's also in jeopardy of being delayed. And I want you to think about that. That's a big deal because the Federal Reserve is, you have to remember, they're being data dependent and making their interest rate decisions based on the jobs reports and the inflation reports. Okay, so with that in mind, I just want to say that the next Federal Reserve meeting is going to take place on October 29th. So there's still time. There's still going to be time for these reports to be generated for them to review and make their decisions. But of course, that's under the assumption that the politicians are going to come to an agreement. They're going to settle this and reopen the governments relatively quickly. Otherwise, I mean, if this thing drags out, then they're not going to produce the reports and the Federal Reserve is going to have to make the decisions just in the dark. Now, another issue is that the government was planning on announcing the Social Security cost of living adjustment on October 15th. But that's another thing. If the inflation report is delayed, then the cost of living adjustment announcement is going to be delayed as well. But I just want to be crystal clear about this. Beneficiaries are still going to get their cost of living adjustments on time for 2026. However, I'm just pointing out that it's going to be frustrating that people are going to have to wait longer to get the official amounts, to get the official announcements. Moving on, I want to show you this. I thought this was very important to know, especially from the stock markets. What does a government shutdown mean for the stock markets? The stats show that a government shutdown does not have a big impact on the stock markets. I don't know if that's a good thing or a bad thing for you. Maybe some people are hoping that a government shutdown would scare the stock market, it would crash the stock market, and then you could buy the dip, create a buying opportunity. But that's not what history shows. You can see here when the shutdown started and when it ended and how the stock market performed during the shutdown period. You're going to see that the average performance during a shutdown was up 0.3%. The median performance was up 0.1%. So it's a fraction of a percent. It's not much impact. Now, this is very important for you to know if you're a precious metals investor. Okay, when a government shuts down, obviously that's not a good look. That screams political instability and it hurts a country's currency. It's common that a US government shutdown weakens the US dollar, which, I mean, already it's having a terrible year. But if the dollar weakens even further because of this, that's going to be good for commodities. That's going to be good for gold and also for silver. But listen, in my opinion, we are in the middle of a monetary reset. We're in the middle of the Great Meltup. My opinion is that cash is trash and these shutdowns are just making the situation even worse for the US dollar. Moving on to the labor markets. Officials are saying that about 750,000 federal employees will be furloughed during the shutdown. Workers are going to be placed on leave without pay. However, these federal employees, they're still going to be paid retroactively. It's basically back pay once the shutdown is over because of the Government Employee Fair Treatment Act. So the CBO says that essential federal employees will have to work without pay during the shutdown. However, again, there's going to be back pay for these employees. But when's the back pay going to be actually received? The law requires that employees be compensated on the earliest date possible after the government reopens, regardless of payroll schedules. However, I do want to point this out. I want to bring this to your attention. There's going to be exceptions. Members of Congress, so our senators, our politicians, the House of Representatives, they're still going to collect their paychecks during the shutdown, which is mandated under Article 1, Section 6 of the Constitution. Yeah, I mean, I just want to say this seems unfair to the millions of federal employees that are going to be waiting for their paycheck. But I guess that's just my opinion. U.S. Postal Service employees are going to continue to receive paychecks because the USPS is a self-funded independent agency. In terms of how a government shutdown is going to affect the U.S. economy in general, it's going to be similar to its effect on the stock market. A shutdown is going to have minimal impact on the U.S. economy. Employees, just think about it, because employees are going to get back pay, the government's going to spend what they would have spent. So again, minimal impact. Now, here's a very important question. How long is the government shutdown going to last? In the past 50 years, the average shutdown lasts about eight days. However, as you can see, it can vary greatly. Maybe it'll last a few days and maybe it's going to get resolved next week, or maybe it's going to drag out for quite some time. But I'll tell you, for certain topics or for certain questions, I have a strong opinion and I share them with you. But for this one, I honestly don't have a strong opinion. You can tell me whether you think that this is going to resolve quickly or whether it's going to drag out. Okay, so here's the situation. The Republicans have a majority in the House of Representatives and in the Senate. So in the House of Representatives, to pass it, you just need a simple majority. So in the House of Representatives, there's no fight there. But in the Senate, this is where the problem is, because there are 100 seats in the Senate and the Republicans have 53 of them. But in the Senate, it's not a simple majority. They need 60 votes to pass it. So in the Senate, the Republicans need to get some Democrats on board. I mean, they've got to work together to pass the bill. So they voted on the funding bill, the CR, and it failed to get the 60 votes in the Senate. It was 55 to 45. So the parties are to stalemate over various things, but it's mainly over health care subsidies. But I'll tell you this, the really sad part is that this government funding bill is just a temporary extension for 7 weeks of funding. So if they actually come to an agreement and reopen the government, the politicians, they're probably going to have this same exact battle in 7 weeks. How sad is that? Now, just for fun, I want to show you this poll about who's to blame for the government shutdown. Now, I want you to keep these two things in mind. So the first thing is that the Republicans control the House and the Senate, right? So they're the ones in charge. However, the Republicans want a temporary extension of the funding with no changes. So it's the Democrats that are the ones that want to repeal certain health care cuts. Their argument is that they're fighting for the people, they want to lower health care costs. However, they're the ones that are asking for changes. So this Marist poll shows that 27% of the people blame the Democrats, 38% blame the Republicans, 31% blame both parties, and 4% say that they don't blame either party. Okay, so that's your update on the government shutdown. I'm sure that the comments are going to be just wonderful in this video. So I look forward to reading them. Thank you so much. Please subscribe, and I wish you a very nice day. Take care.