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.
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