OCTOBER 8, 2013 AT 10:23 AM
The government shutdown that started last Tuesday has already cost $1.6 billion in lost economic output, according to market research firm IHS Inc.
Should the shutdown last through October 9, the total will come to $2 billion. That’s equivalent to the cost so far of the “biblical” flooding that has ravaged Colorado. If it lasts three to four weeks, Moody’s has estimated that the total cost to the economy could come to $55 billion. The shutdown could reduce economic output by 1.4 percent.
The daily average cost of the shutdown has dropped to $160 million, from$300 million at the start of the crisis.
The total cost can be broken down into a variety of factors. Federal spending was expected to be reduced by about $8 billion, which could save 0.8 percent off of GDP. The original furlough of 800,000 government workers was sucking about $1 billion a week from the economy in lost pay, although fewer workers remain furloughed today. The government stands to lose out on billions in tax revenue, and all told the shutdown is expected to increase the deficit. There are many other factors that could impact the economy but haven’t been tallied up, such as government contracts put on hold, loans that aren’t going outfrom the Small Business Administration, and permits that won’t be granted.
Other important programs that support the neediest, like the nutrition program for low-income mothers and infants and the job training programs that are part of food stamps, aren’t getting any federal money in the shutdown.