Impacts of Government Shutdown

Summary

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Podcast Summary: "Impacts of Government Shutdown"

Podcast: Jill on Money with Jill Schlesinger
Host: Jill Schlesinger, CFP®
Date: October 2, 2025

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Episode Overview

In this special episode of Jill on Money, host Jill Schlesinger addresses the urgent topic of the ongoing U.S. government shutdown. Tapping into her expertise as a Certified Financial Planner and financial commentator, Jill explains the real-life impacts of the shutdown—from federal workers’ struggles to ripple effects across the wider economy and financial markets. The episode includes a segment from Jill's appearance on CBS Mornings and actionable advice for those directly affected. True to her style, Jill provides clarity and support, offering a community resource for listeners under financial stress.

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Key Discussion Points & Insights

1. Personal Impact on Federal Workers and Military Personnel

• Immediate Effects:
  • Hundreds of thousands of federal employees and military personnel are either furloughed or working without pay.
  • Emotional toll highlighted: "The personal financial lives of these people has been upended and it's intense." (Financial Expert/Guest, 03:26)
• Delayed Pay:
  • Workers generally receive back pay after a shutdown, “but that doesn’t help if you’re fighting with your landlord or need money right this second.” (Financial Expert/Guest, 04:11)
• Advice for the Affected:
  • “Communicate with your landlord, utility company... say, I could be late. Do not hide, because we really want these people to stay afloat.” (Financial Expert/Guest, 04:24)

2. Continuity of Key Government Programs

• Social Security, Medicare, Medicaid:
  • These benefit programs continue to operate as normal—checks and payouts are not currently at risk.
  • Potential for processing delays: “If you have an application with one of these programs, that may be a little bit delayed, but you will receive your checks. Don’t worry.” (Financial Expert/Guest, 04:24)
• Assistance Programs:
  • SNAP (food stamps) is also functioning during the shutdown.

3. Economic Ripple Effects

• Consumer Impact:
  • Not just federal employees: “The people where they shop are going to struggle. There are people involved in this.” (Financial Expert/Guest, 03:35, 07:02)
• Credit Risk:
  • Jill cautions against falling into credit card debt if possible.
  • Suggests considering borrowing from retirement accounts only as a last resort.

4. Impact on the Federal Reserve and Economic Data

• Data Delays:
  • “The collection and dissemination of economic data could halt. We’re supposed to get a jobs report tomorrow. If we don’t have the government open, that is likely to be delayed.” (Jill Schlesinger, 05:18)
  • Inflation reports may also not be released.
• Federal Reserve Decisions:
  • Lack of data could lead the Fed to “be more cautious” or “delay their next policy meeting.” (Jill Schlesinger, 05:43)
  • Next Fed meeting is scheduled for October 28–29.

5. Effect on Housing and Mortgages

• Flood Insurance Program:
  • “A shutdown means no authorization for new National Flood Insurance Program policies. That puts about 1,300 property transactions per day at risk.” (Jill Schlesinger, 05:55)
• Mortgage Processing:
  • Existing National Flood Insurance policies remain in effect.
  • Limited direct impact on mortgages through Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA (“about 70% of all first mortgages”).
  • However, “past shutdowns… there could be delays in processing loans.” (Jill Schlesinger, 06:20)

6. Stock Market and Broader Economic Impact

• Market Response:
  • “There was a very muted reaction as the government was shutting down. I think most investors expected it.” (Jill Schlesinger, 07:04)
  • “The longer that a shutdown persists, the more we have a chance of increased volatility… uncertainty does tend to weigh on markets.”
• Historical Perspective:
  • Shutdowns rarely affect markets or the overall economy long-term. Most impacts are direct, short-term, and “negligible—we make it up on the other side.”
• Human Consequences:
  • Jill consistently refocuses on people: “But you know, I still come back to the people… this is a real burden.” (Jill Schlesinger, 07:34)
  • Small businesses that serve federal workers are highlighted as “no one’s making that up to you, you’re not going to get repaid.” (Jill Schlesinger, 07:47)

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Memorable Quotes & Moments

• “The personal financial lives of these people has been upended and it's intense.”
  — Financial Expert/Guest, 03:26

• “Although those wages get paid back usually when the government reopens, that doesn't help you if you're fighting with your landlord.”
  — Financial Expert/Guest, 04:11

• “Communicate with your landlord, you communicate with your utility company… don’t hide, because we really want these people to stay afloat.”
  — Financial Expert/Guest, 04:24

• “If you are a government worker, a furloughed worker, if you gotta show up and not get paid, this is a real burden. And if that's you, we want to hear from you.”
  — Jill Schlesinger, 07:34

• “Change your work, Change your wealth, Change your life.”
  — Jill Schlesinger, 08:33

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Timestamps for Important Segments

• 01:53: Episode Welcome & Purpose
• 03:26: Personal Impact on Federal Employees & Military
• 04:24: Advice on Handling Missed Payments, Continuity of Major Programs
• 05:18: Effects on Federal Reserve and Economic Reporting
• 05:55: Housing Market and Flood Insurance Risks
• 06:20: Mortgage Processing Delays
• 07:04: Market Reaction & Historical Context
• 07:34: Human and Community Impact; Invitation for Listener Stories
• 08:33: Jill’s closing encouragement

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Tone and Community Engagement

Jill maintains her signature direct yet empathetic tone, blending actionable financial advice with a strong focus on community and emotional support. She invites affected listeners to get in touch directly and promises priority assistance.

"If that's you, we want to hear from you... We will help you out. Go to jillonmoney.com and click the Contact Us button." (Jill Schlesinger, 07:50)

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Conclusion

This concise episode is a must-listen for anyone worried about the ripple effects of the government shutdown—whether you’re a federal employee, a member of a military household, a small business owner, or simply concerned about the markets. Jill Schlesinger breaks down the facts, dispels panic, and offers practical next steps alongside a call for collective support.

For more resources or to share your story, visit jillonmoney.com.

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Transcript

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[Jill Schlesinger]

Welcome to the Jill on Money Show. It's Thursday, October 2nd, so a couple of things. Number one, I know it's Yom Kippur Jewish listeners. I am taping this yesterday. I'm taping this on Wednesday afternoon. And I wanted to make sure that we added something to the podcast feed about the government shutting down, which it.

[Podcast Host/Advertiser]

Is now shut down.

[Jill Schlesinger]

And I know that this is unnerving to a lot of folks, so I thought that we might be able to interrupt our normal programming and give you a segment that I did this morning that is today being Wednesday and it will still hold. But I want everyone to kind of take a deep breath and understand that those of you who are impacted, especially negatively impacted by this shutdown and by the furlough, please do get in touch with us. Go to jillonmoney.com, click the contact Us button, write us a note. We will give you priority. You will go to the front of the line and we will take care of each other as a community, because that is what we do. So I want to play this segment and then on the other side of it, I want to talk a little bit about your investments during this time and some of the impact that you might see going forward. So here is yesterday morning's segment on CBS mornings. Your anchors are Vladimir Dutier, Gayle King and Tony decouple. How is a shutdown gonna wash through the economy?

[Financial Expert/Guest]

Well, first of all, we know that the most direct impact are federal workers in the military. These workers, people who are deemed essential who have to show up to work and not get paid. I can't put a finer point on this, that the personal financial lives of these people has been up every ended and it's intense. So with hundreds of thousands of people being out of work, some being forced to go to work without pay, it could cause a little bit of a dent in the economy. But I don't think that's the issue. I actually think it's a much more personal issue that these people are going to struggle and the people where they shop are going to struggle. And although those wages get paid back usually when the government reopens, that doesn't help you if you're fighting with your landlord.

That doesn't help if you need the money right at the second. And I keep thinking about all the people that are making these decisions. They're still getting paid and all the other people are sitting here going, what? But what about big government programs like Social Security, Medicare, Medicaid, Will those stay intact?

Totally intact. You'll receive benefits, SNAP programs, food stamps. Those things are actually operating as normal. The one thing I'll say is that if you have an application with one of these programs, that may be a little bit delayed, but you will receive your checks. Don't worry. Just one thing. One thing, though, that I want to be clear about with the people also is that you should be communicating with anyone if you feel like this is the worst case scenario. You communicate with your landlord, you communicate with your utility company. You say, I could be late. Do not hide, because we really want these people to stay afloat.

Do people give you grace during that time?

Sometimes and sometimes not. It depends how long this lasts. I mean, for every week this goes on, people are going to struggle. They're going to dip into their savings. What I hope they don't do is go into credit card debt. Hopefully they have some savings that they can access. Maybe you actually pull some money and borrow it from your retirement plan. If you're feeling the pinch that's something we should consider.

[Jill Schlesinger]

Okay. A couple of things that you need to know. First of all, that this shutdown is going to actually impact the Federal Reserve in a pretty meaningful way. Because right now the collection and dissemination of economic data could halt. So we're supposed to get a jobs report tomorrow. And if we don't have the government open, that is likely to be delayed. And that also means that upcoming inflation reports may not be released. And I'm wondering that if this goes on for a while without those reports and other data points, will the Federal Reserve be more cautious? Will they do nothing? Will they choose to delay their next policy meeting? Stay tuned. That meeting is supposed to take place on October 28th and 29th. I was also wondering what this might do to the housing market. I got in touch with my friends over at the national association of Realtors and they say that a shutdown means no authorization for new National Flood Insurance Program policies. That's not great. And they think that actually puts about 1300 property transactions per day at risk. All National Flood Insurance Program policies that exist are in effect when it comes to mortgages. I think limited impact on the government backed mortgages through Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA, all those organizations together, they provide or guarantee about 70% of all first mortgages that are out there. But when you look at past shutdowns, nar national association of Realtors say that there could be delays in price processing loans. So that's also important. Now I know some people are worried about what's going to happen to the markets. And you know, there was a very muted reaction as the government was shutting down. I think most investors expected it. But obviously the longer that a shutdown persists, the more we have a chance of increased volatility. It's kind of like you don't know. And uncertainty, it does tend to weigh on markets. But you know, I don't think if you look historically we see a lot long term financial market impact from a government shutdown. And the same thing goes for the economic impact. It's usually a direct cost that is negligible. We make it up on the other side of it. But you know, I still come back to the people. There are people involved in this. If you are a government worker, a furloughed worker, if you gotta show up and not get paid, this is a real burden. And if that's you, we want to hear from you. Or if you're in a small business and you serve those workers, no one's making that up to you, you're not going to get repaid. So anyone who is going through this that you feel like there's some pressure on your financial life, get in touch with us. We can help you out. Go to jillonmoney.com Click the Contact Us button. Let us know if you want to come on the air by checking the box and and you can check out all the content that lives on the website. You can subscribe to us on the Odysee app or wherever you find your favorite podcasts. Don't forget to do something nice for someone else today. Change your work, Change your wealth, Change your life. Thank you for listening and we'll talk to you tomorrow.

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