The Immediate Economic Costs Of Shutting Down The Government
There will be a number of economic consequences of shutting down the government, and it is not going to pretty. Even at this late hour, there is likely to be some fallout, even if the right wing comes to its senses. Here are some of the ways a shutdown will affect the economy.
- A shutdown that lasted between three and four week could cost the economy about $55 billion, by the estimate of Moody’s Analytics economist Brian Kessler.
- Washington, DC, would lose $200 million a day on lost wages and lost spending by those who get furloughed. That estimate doesn’t include tourism, and the huge losses DC will feel from the museums and national mall being closed.
- The shutdown would “reduce federal spending” by about $8 billion, which could reduce GDP growth by .8 percent annualized, according to a report released Monday by Goldman Sachs.
- Moody’s Analytics’ Mark Zandi pegs the amount lost in economic growth in the fourth quarter at as much as 1.4 percent.
- One billion dollars a week from the pay of the roughly 800,000 federal employees will be lost from the U.S. economy.
But that’s only part of the story. You can add:
The loans that the Small Business Administration will stop making, the permits that the Environmental Protection Agency won’t issue, the contracts that will be put on hold, and the nutrition assistance for infants and mothers that won’t go out. Or, of course, a tanking stock market that could ruin consumer confidence.
