Posted originally on Oct 2, 2025 by Martin Armstrong |  

The US government shut down once again as our public servants refused to work in a partisan fashion. Over 2.1 million civilian federal employees will be affected, with 750,000 furloughed without pay. Naturally, Congress will still receive a paycheck and their lobbying checks. The duration of the shutdown is unknown, but estimates state the bickering could cost the US economy up to $2 billion per week.

Non-essential offices, websites, and services are unavailable. National parks and museums are closed to visitors. Passport processing will be delayed. The daily cost of compensating the furloughed workers is $400 million. Military members may face delayed pay, while contractors face layoffs.

Most concerning is the data blackout—the Bureau of Labor Statistics will be unable to release its September non-farm payroll report slated for October 4. Data regarding the consumer price index and producer price index will be delayed. Retail sales, housing starts, every piece of data compiled by the federal government will be delayed and amplify uncertainty. The key information the Federal Reserve and investors rely on will be unavailable, and if the shutdown carries on for more than two weeks, there will be a massive spike in volatility and a potential delay in rate cuts. The Fed will be forced to rely on private estimates like the ADP jobs report that are less reliable.

The Democrats insist on expanding COVID-era funding for Obamacare, and insist the GOP reverse the decision to cut the Medicaid budget. Neither side is willing to compromise. Leaders are begging Congress to simply stay in Washington until a decision is reached.

“There isn’t any substantive reason why there ought to be a government shutdown. This is something that has been done routinely, as I said, 13 different times when the Democrats had the majority. But we are not going to be held hostage for over $1 trillion in new spending on a continuing resolution,” Senate Majority Leader John Thune, R-S.D., said ahead of the vote.

The Medicaid cuts alone are expected to save the government $840 billion over the next decade. Cutting the premium tax credit extension could save $350 billion over the same period, and work and eligibility restrictions could save another $344 billion. Additional recessions and funding cuts to government agencies are expected to save up to $9 billion in 2025 alone.

Non-citizens without access to other coverage DO benefit from these extensions. US taxpayers have spent billions on providing health coverage to migrants. Those earning between 100% to 400% of the federal poverty level will also benefit, as will anyone earning 400% above the threshold if their premiums exceed 8.5%.

“It is unclear how long Democrats will maintain their untenable posture, making the duration of the shutdown difficult to predict,” Office of Management and Budget (OMB) Director Russ Vought penned in a memo. “Regardless, employees should report to work for their next regularly scheduled tour of duty to undertake orderly shutdown activities.”

“We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them, like cutting vast numbers of people out, cutting things that they like, cutting programs that they like,” President Trump warned.

Trump could possibly lay off more federal employees in non-essential roles, and a hiring freeze is already in place. The president has the authority to cut funding to programs favored by the Democrats such as social services and environmental programs. Sanctuary cities or jurisdictions could see funding withheld. The federal government will not spend on non-essentials during this shutdown, but that will only anger Democrats who refuse to budge.

Congress serves no purpose. They represent private lobbying interest groups and serve the invisible hand rather than the people of the United States. A private company would never shutter its office over a fiscal budget disagreement. Our public servants must reach a resolution immediately, and I see no reason why they deserve pay during a deadlock. These individuals are on taxpayer-funded vacation for the majority of the year and refuse to perform the minimal work they are expected to do. It seems they are unfit for the job. Fire everyone and start fresh.