Government shutdown: Federal workers not being paid puts another strain on economy

CLEVELAND - It seems like every day we're hearing about a new way the government shutdown is impacting us in northwest Ohio. As it drags out, you can expect more effects on your life in both small and big ways.

Oct. 1 was the fiscal year deadline and Congress did not get a budget in place. This is the 18th shutdown in recent decades and just like the ghosts of shutdowns past, everything from housing, to permits, and finances are starting to haunt us again in October.

"I think it stinks," said Robin Shamblin from Garfield Heights after we asked her what she thought of the government shutdown.

She has a son, Randy, in the military. She worries about Randy, his family and others who are or could be affected by the continued shutdown.

"It's all political," Shamblin said. "They're all fighting for what they think is right and they don't care about normal, the everyday blue collar people."

Politics to most, yes, but there's also a big money problem.There's not a temporary federal cash plan in sight and Cleveland State University's Dr. Ned hill said that could mean economic disaster.

"If we keep... large numbers of federal workers unemployed, furloughed for a long period of time, realize that's another drag on the whole economy," Dr. Hill said. "Because that's spending that's being removed."

Loans to buy houses have become harder to approve in northeast Ohio as lenders try to confirm tax returns and social security data with agencies like the IRS that are severely cut back. Housing is one big piece in the economic puzzle, but other reports that investors -who take care of your money- need like monthly unemployment, inflation, retail sales and more are not being generated.

"This recovery we've seen the last several years is fragile," said Jon Shane in Pepper Pike. He is a top financial advisor with Merrill Lynch. He said as federal employees are out of work, all of the effects put pressure on just how much goods and services are worth in the business world.

"If their business is going to slow, they are not going to hire," Shane told us. "If (the shutdown) increases the deficit because it's pushing the interest rates higher, if that happens you and I will pay more in taxes."

Shamblin continues to watch the shutdown and its effects, and has a message for Congress on behalf of her and her granddaughter's future.

"Get it resolved. We have people who need it. And we deserve it. Working class people," she said staring straight into our camera.

One important thing to note, even though the IRS is not operating at full capacity, people who filed for automatic extensions in the spring and have tax returns due, they are still due regardless of the shutdown.

We will stay on top of the shutdown developments.

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