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The effect will be much larger than just those who have government contracts, said Sound Strategy's Jeter.
Jeter said his company repositioned itself away from government a year ago after losing two army contracts in the growing uncertainty around the sequestration, which is now in effect. Even though his company has turned away from the public sector, Jeter said he expects to feel a big hit from the shutdown.
"Those are people who would normally be spending money. ... All of that stuff trickles down. With the government shutting down like this, there has to be an economic fallout that is going to be far reaching. It's just going to affect so many businesses in so many different ways," Jeter said. "The fear is that with all of this craziness going on with the government, it will start to affect the psyche of the SMB market."
Jeter said that all of the companies with federal government contracts will be affected, with layoffs looming if the government does not renew the contracts. The government cannot sign or extend contracts during the shutdown.
Jeter said he blames all of Congress for the problem and said it will be a stunt on innovation and small business, calling the entire situation "unbelievable."
"Innovation starts with small business. It starts with small ideas that grow into big ideas. That's just where it is. I have to innovate every day as a small business owner. ... Once you've taken that opportunity away from a guy like me who has that need to innovate to survive, I think everyone suffers. It's what makes America America. I have that spark in me that wants to make things better than they are," Jeter said.
"Now that we have this government shutdown, it's just so clear that everyone is so thoroughly entrenched in their ideological foxholes that they can't even see the rest of the world around them, and now it's affecting small business," Jeter said. "When it affects small business, it affects everyone."