aren’t cheap. This year’s closure, which ended Thursday, has likely
cost the government and the economy billions of dollars, according to
economists and policy analysts.
Below are a few of the estimates we’ve seen, plus a video of Federal Diary
columnist Joe Davidson discussing the financial impacts:
* $24 billion in lost economic output
percent of projected annualized GDP growth, according to the Standard
and Poor’s ratings agency. Similarly, Moody’s Analytics estimated the
impact at $23 billion.
The ratings agencies calculate their estimates using complicated
formulas that consider past economic behavior, combined with the number
of federal employees and contractors who were not paid during the
shutdown, according to Moody’s chief economist Mark Zandi
* $2.1 billion in government costs for the fiscal 1996 shutdowns
, calculated in today’s dollars, according to Office of Management and Budget estimates at the time
The impact could be worse this time, since the 2013 shutdown forced
more government employees off the job. Most of the cost of the fiscal
1996 closure resulted from agencies paying furloughed workers for hours
they didn’t actually work.
* $450,000 a day in lost revenue at National Parks, according to the National Park Service.
late last week, when a handful of states agreed to fund operations for
the some of the parks within their boundaries. The costs may have been
lower from that point forward, as some parks reopened and began
collecting fees again.
The numbers come from top-line estimates by the National Park Service
, which made projections based on October 2012 park attendance and fee collections.
* $2.4 billion in lost travel spending
based on the U.S. Travel Association’s estimate of $152 million per
day. The organization said it based its numbers in part on the National
Park Service projections, as well as estimated reductions in business
travel for federal employees and the federal government.
As most politics junkies know, the government could soon shut down
again if Congress and the White House cannot agree to another spending
plan early next year. The agreement
signed by President Obama early Thursday morning will only fund operations through Jan. 15.
The deal also suspended enforcement of the debt limit until Feb. 7,
which means another confrontation over the nation’s borrowing could
occur again sometime in March.
S&P said in a statement Wednesday that the threat of new
debt-ceiling and shutdown standoffs early next year could “weigh on
consumer confidence, especially among government workers that were
“If people are afraid that the government policy brinksmanship will
resurface again, and with the risk of another shutdown or worse, they’ll
remain afraid to open up their checkbooks,” the agency said. “That
points to another Humbug holiday season.”
S&P estimated that a default could force the government to reduce
spending by 4 percent of annualized GDP, which would “put the economy
in a recession and wipe out much of the economic progress made by the
recovery from the Great Recession.”
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