Shutdown Cost the US Economy $24 Billion 767
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.'"
Re:Really? (Score:2, Informative)
Latest estimate I've seen is 9.7T over 10 years.
Re:Really? (Score:5, Informative)
If the GAO is correct, it will SAVE circa 4.8 billion per year thanks to outcome based payments
Re:Where did that money go? (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.
Re:Let me guess (Score:2, Informative)
Nah, that is the job of the "non-partisan" media. Guess which way they broke on it?
Networks blamed shutdown on GOP in 41 stories --- 0 for Dems [washingtonexaminer.com]
You would never guess this, would you?
Journalists dole out cash to politicians (quietly) [nbcnews.com]
Msnbc.com identified 143 journalists who made political contributions from 2004 through the start of the 2008 campaign, according to the public records of the Federal Election Commission. Most of the newsroom checkbooks leaned to the left: 125 journalists gave to Democrats and liberal causes. Only 16 gave to Republicans. Two gave to both parties.
Do journalists' political donations (mostly Democratic) = news bias? [latimes.com]
You'll never guess what he says he found -- 235 journalists donating to Democrats while only 20 gave to Republicans for a total of $225,563 to Democrats and $16,298 to the the GOP-inclined. - See more at: http://latimesblogs.latimes.com/washington/2008/07/media-politics.html#sthash.hhVKqE2Z.dpuf [latimes.com]
The media needs to get back to being consistently "equal opportunity bastards."
Re:The govenment should just double spending. (Score:5, Informative)
That's average, and lower than other industrialized countries.
Anonymous Coward (Score:0, Informative)
This is rubbish,
$3.1 billion in lost government services - Because they still paid the employees even though they were home, they could have kept them working and nothing would have been lost.
$152 million per day in lost travel spending (what dose this even mean? Lost travel so trips government that they would have taken and had to be delayed?)
$76 million per day lost because of National Parks being shut down, own fault employees were still paid yet services were closed.
$217 million per day in lost federal and contractor wages same as above.
The government didn't shut down only 17% of employees were considered non-essential, the 17% were even still paid for staying at home, everything was still running and how much was spent in putting up all those barricades for (closed) monuments/parks
The real corrosion on the economy is simply the fact that the fiat currency which is the US dollar is so diluted that the interest from the debt owed by the US government can't be paid with the current spending model. This should have been dealt with in 2006 - 2007 now its just worse.
The real cost of the economy is the non-fiscally responsible politicians.
Read: Don't Believe The Debt Ceiling Hype: The Federal Government Can Survive Without An Increase -Forbes-
http://www.forbes.com/sites/jeffreydorfman/2013/10/03/dont-believe-the-debt-ceiling-hype-the-federal-government-can-survive-without-an-increase/
Re: Really? (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
Re:Meh. Do people think before they write this jun (Score:4, Informative)
Or perhaps had they been smart enough to not spend their hard earned(I use that term loosely with the feds) money on iduds and new cars every few years they would have had enough cash on hand to pay ALL of their bills for at least 3 months rather than go belly up from not working for only 2 weeks.
We ALL always have a choice. The idea that someone only has the choice between getting a paycheck from the federal government and going and getting another loan to pay for the first loan that they can't pay because they were piss poor planners is not only disingenuous, but morally bankrupt. In this country we all have not only the choice, but the opportunity to better ourselves and then some.
Another good question is WHY IN THE FLYING MONKEY POO do we need 800,000 Federal workers? And before anyone goes there, yes, I've lost my job before and was at one time out of work for more than 3 months. In the end, it all comes down to responsibility. Responsibility of both idiot political stooge parties for creating this mess and responsibility of the individual collecting a paycheck to care and provide for their families.
It never occurred to you that you can have more than one emergency at a time? For instance, having to pay for expensive chemo treatment drained your savings 3 months ago, but at least you've got a nice stable federal job! Oh wait... Also, remember these workers also had to deal with a 10% pay cut this year due to sequester furloughs, so their savings were already a bit light.
Re: Really? (Score:5, Informative)
UPS only dropped coverage on employee spouses who had insurance through their own employer. Any who didn't are still covered by UPS. What is wrong with that?
Re:Really? (Score:5, Informative)
I'll compare apples to apples.
http://www.cbo.gov/latest/National-Security/Iraq-and-Afghanistan
http://www.cbo.gov/publication/44176
It should be noted that the cost for the wars contain 12 years of appropriations and are actual, while the costs for the ACA contain 10 years of projections.
Re: Really? (Score:5, Informative)
Had a bone marrow transplant last year. I'm still being treated for same. So far, insurance has paid everything without a quibble, and my total out-of-pocket has been a few thousand dollars.
Note that this followed several bouts of chemotherapy that were also paid without a quibble.
No, my insurance is not a "cadillac plan", it's the middle-of-the-road plan offered by my employer.
Re:#1 thing undermining the dollar? (Score:4, Informative)
$17 trillion in debt....
Nothing else, even a shutdown or default is undermining the dollar worse than running $1+ trillion deficits.
And if we don't stop, the government shutdown will eventually become PERMANENT. How much will that cost the economy folks.
Oh, and might I add, that the Democrats are punks because all they do is kick the bucket down past the next election.
Nothing else? How about the United States losing it's status as the reserve currency? How about the loss of said status causing the interest on that debt to skyrocket?
Yes, that debt is bad, but believing that it must be reduced at all costs - and one of those costs being increasing the interest rate on the debt to make the debt worse - is a bad solution.
The debt is bad yes. Other countries have bad debt too. The debt needs to be controlled. Risking default is not a way to control the debt, but amplify it.