President Obama argued this morning that government shutdown “inflicted unnecessary damage” to the U.S. economy and damaged America’s credibility around the world. There can be no real doubt that this assessment is true.
It’s now time to assess just how much unnecessary damage was done.
Containers of goods idling at ports. Reduced sales at sandwich shops in downtown Washington. Canceled vacations to national parks and to destinations abroad. Reduced corporate earnings forecasts. Higher interest payments on short-term debt.
Even with the shutdown of the United States government and the threat of a default coming to an end, the cost of Congress’s gridlock has already run well into the billions, economists estimate. And the total will continue to grow even after the shutdown ends, partly because of uncertainty about whether lawmakers might reach another deadlock early next year.
It’ll take a long while before economists can come up a precise price tag, though Standard & Poor’s published a rough estimate yesterday: the shutdown cost the nation’s economy $24 billion.
Just to clarify, this doesn’t refer to $24 billion in lost government spending; this is $24 billion in lost economic activity. That’s a chunk of the economy, gone, for no reason.
The ripple effects matter. More from the New York Times’ report:
The 16-day shutdown itself has already led to the biggest plunge in consumer confidence since the collapse of Lehman Brothers in 2008. Howard R. Levine, the chief executive of Family Dollar Stores, said his customers, most with modest incomes, had pulled back on spending this month. […]
The gridlock also had ripple effects on many industries that rely on the federal government in one way or another. Import inspections, export financing and the issuance of oil and gas permits all slowed.
Remember, the economy wasn’t exactly in the midst of a booming recovery before the shutdown. The idea that the nation had to endure this gut-punch for reasons Republicans still can’t explain is genuinely scandalous.
What’s more, let’s also not forget that conservative policymakers were warned, repeatedly, that the shutdown would have precisely these effects. Tragically, they went through with it anyway.