If you were managing your finances like the US government, you would want to pay your bills a few hours before many services shut down. Otherwise you would have to sit in the dark and wait.

On October 1, the US Congress did not allocate funds to pay its current bills. The impasse is similar to the problems US leaders are facing with the debt limit crisis. The extraordinary amount of US public debt is not decreasing. But the bureaucratic impasse is delaying salary, operational and service payments.

Yahoo Finance highlighted how a possible shutdown would affect people individually if the Washington administration fails to reach an agreement:

Student loans

The government shutdown could have a major impact on student loan borrowers. The US government could temporarily lay off the vast majority of employees, including Department of Education employees.

In 2021, the US Department of Education (DOE) published a contingency plan in case of a government shutdown. Accordingly, the DOE will only deploy its employees to prevent significant damage and provide necessary support. In the event of a prolonged shutdown, no more than 11 percent of the staff will be recalled during the shutdown.

In such a case, DOE operations are expected to grind to a halt. In other words, the process of approving loan and grant applications and ensuring disbursements would be blocked.

Some DOE programs with mandatory funding may make payments during the shutdown. However, these payments are expected to be made only for a short period of time if funds are available.

Federal programs and social security services

Social Security checks and electronic payments vital to Americans could be delivered even if the government shuts down. The Medicare and Medicaid programs are also expected to be protected from reductions in federal funding. In other words, American retirees will continue to receive their monthly social security payments and their health benefits will not be cut.


Many federal employees in critical areas such as airport security and air traffic control will continue to work in the event of a government shutdown. However, they should still be prepared for longer wait times at airports.

During the last shutdown, checkpoints were extended, flights were delayed and other travel disruptions occurred.

Americans may also experience problems with other travel-related services. For example, for Americans who need to update their passports or obtain visas, although services are still available, they are expected to be much slower. In addition, national parks and museums are expected to close or offer limited services.

Economy and investments

The impact of the shutdown on individual investments and economies will depend on the length of the shutdown. With government payments delayed, the impact could be limited if Congressional leaders resolve the issue quickly.

During the 2013 government shutdown, which lasted just over two weeks, 40% of Americans reduced consumer spending, according to a Goldman Sachs survey.

For stock and bond markets, investor sentiment could be shaken in the short term. This could mean temporary market volatility. In other words, American private pension investors may need to reduce control of their funds. YahooFinance reports that it would be a mistake to sell long-term investments because of the shutdown news. The markets will probably catch up in the weeks after the shutdown.

The good news for fixed income investors may be that interest and bond payments will continue to be made.

Civil servant salaries

In the event of a government shutdown, non-essential federal civil servants will not be paid until an agreement is reached and the government reopens. Contract workers and private sector companies providing services to the government may also not be paid during this period

"Soldiers can deploy without pay," Pentagon Deputy Press Secretary Sabrina Singh said this week. Soldiers' families will of course be affected." Singh said that for soldiers who do not receive their paychecks, this problem means food, childcare and all other expenses.