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Shutdown Cost the US Economy $24 Billion

Posted by Unknown on from the congress-blames-lazy-workers dept.

Hugh Pickens DOT Com writes "Time Magazine reports that according to an estimate from Standard & Poor's, the government shutdown, which ended with a deal late Wednesday night after 16 days, took $24 billion out of the U.S. economy and reduced projected fourth-quarter GDP growth from 3 percent to 2.4 percent. The breakdown includes about $3.1 billion in lost government services, $152 million per day in lost travel spending, $76 million per day lost because of National Parks being shut down, and $217 million per day in lost federal and contractor wages in the Washington D.C. metropolitan area alone. Hundreds of thousands of federal workers bore the economic brunt of the shutdown but small businesses also suffered from frozen government contracts and stalled business loans. With the deal only guaranteeing government funding through January 15, the situation could grow worse. 'This is a real corrosion on the economy,' says Mark Zandi, chief economist for Moody's Analytics. 'If we have to go down a similar road in the near future, the costs are going to continue to add up.'"

4 of 767 comments (clear)

  1. Re:Really? by Anonymous Coward · · Score: 5, Informative

    If the GAO is correct, it will SAVE circa 4.8 billion per year thanks to outcome based payments

  2. Re:Where did that money go? by Anonymous Coward · · Score: 5, Informative

    It's an S&P estimation of how much commerce failed to happen as a result of the shutdown. Lots of people cut off travel plans, tightened their belts, and so on; investment was effected to some degree, as well.

    The shutdown cut back a lot of spending, both government and otherwise.

    There's still a lot of fear that the shutdown's aftereffects could put a squeeze on the holiday quarter, especially if (for example) people with federally-funded jobs tighten back and don't do much holiday shopping out of fear of this shit happening again in January.

    $24b is probably conservative to some extent, depending on if S&P was counting only the duration of the shutdown or was extrapolating for future aftereffects.

  3. Re:The govenment should just double spending. by Anonymous Coward · · Score: 5, Informative

    That's average, and lower than other industrialized countries.

  4. Re: Really? by isorox · · Score: 5, Informative

    In my country, 20% of my income goes to health care, and everyone finds it normal.
    It's the Americans that are weird.

    17.9% of American GDP goes on health care, or an average $7,960 per person per year

    Compare to Canada, which is 11.4% and $4,314 per person per year