Economist Podcasts Shut happens: US federal funding stops
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Oct 1, 2025 In this discussion, John Prideaux, a seasoned political analyst from Checks and Balance, delves into the recent US government shutdown, exploring its causes and immediate impacts on federal services. He highlights Trump’s threat of irreversible cuts. Meanwhile, Alex Hearn, an AI expert, reveals alarming security vulnerabilities in large language models, including prompt-injection risks. Together, they provide insights into how seemingly innocuous features could lead to major data leaks, emphasizing the balance between utility and security in AI.
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Shutdown Stops Core Government Functions
- A US federal shutdown means money to federal agencies stops and many workers go unpaid or furloughed.
- Hidden functions like embassies and statistical agencies also halt, affecting diplomacy and data flows.
Partisan Polarization Lengthens Shutdowns
- Shutdowns once ended quickly because the governing party risked blame, but polarization has weakened that incentive.
- Recent shutdowns have become longer and more damaging as partisan feedback loops broke down.
Markets Largely Shrug At Shutdowns
- Markets historically treat shutdowns as limited economic events and often remain calm.
- Analysts note small currency moves but no large sustained market disruptions from shutdowns alone.