The “Shutdown” Helped The Economy

A funny thing happened when 17 percent of the federal government shut down for two-and-a-half weeks earlier this year … America’s economy produced its best two back-to-back job reports in over a year. Which begs the question … why can’t that 17 percent of government go away forever? Oh right ……

A funny thing happened when 17 percent of the federal government shut down for two-and-a-half weeks earlier this year … America’s economy produced its best two back-to-back job reports in over a year.

Which begs the question … why can’t that 17 percent of government go away forever?

Oh right … panda cams. We gotta have those panda cams.

Anyway … let’s revisit some of the mainstream media moaning in the immediate aftermath of the “shutdown.”

“Hundreds of thousands of federal workers were furloughed during the shutdown, but that was just one of the widespread effects of the first shutdown in nearly two decades,” CNN bemoaned. “Federal contractors also furloughed thousands of employees. Small businesses reeled from frozen government contracts and stalled business loans. Closed national parks hit the tourism industry. Military families saw childcare and other services shuttered. Consumers, also scared by the debate over raising the debt ceiling, started to cut back.”

“Those tens of billions of dollars of lost economic activity (along with a shortfall in government taxes on that activity) were obliterated by a political standoff that produced little more than a pact to try again to reach a long-term agreement in three months,” MSNBC whined, blaming the shutdown on “the hostage crisis that began with sweeping demands from House Republicans.”

These doom-and-gloom pronouncements were echoed by the White House – which led the pre-shutdown Armageddon chorus.

“The costs and impacts of the shutdown were significant and widespread,” Barack Obama’s budget director Sylvia Mathews Burwell said last month.

Right … except they weren’t.

At worst, the so-called “shutdown” was a non-event. At best it may have done something all that government growth failed to do … “stimulate” the economy.

Imagine that …

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Manray December 6, 2013 at 11:15 am

I think the numbers will bear out that the economy did well DESPITE the foolish government shutdown. Think how well it might have done?

The Colonel December 6, 2013 at 11:42 am

“…Think how well it might have done?”
You mean if the gubamint had stayed shut down for several more weeks or months?

? December 6, 2013 at 11:53 am

Or even better, if the government shutdown was actually a “shutdown”, meaning setting the bar a little higher than 17%.

nitrat December 6, 2013 at 2:39 pm

I would have thought a mercenary would like the idea of the government ‘contractors’ getting their money.

The Colonel December 6, 2013 at 2:54 pm

I’m not sure who you’re referring to – my mercenary days are long over.
If it was up to me all of our contractors would have been cut long ago. I’ve spent a good bit of this rotation looking for ways to descope contracts, shed contractors and stop the money hemorrhage.
Funny thing is about half of my peers support the effort and the other half pretend like they’re getting a cut of the profits. Since the President is set on keeping our force level below an arbitrary number the only way we can accomplish some functions is to bring in the contractors since they don’t aren’t included in the force count.

The Colonel December 6, 2013 at 11:28 am

How can this be – the liberal media is saying that the “shutdown” cost $60,000,000,000.

nitrat December 6, 2013 at 2:39 pm

What liberal media is that? The $24 Billion is pretty much the only thing I’ve seen or heard.
Are you sure your right wing fascist media isn’t just telling you the ‘liberal media’ said $60,000.000.000?

The Colonel December 6, 2013 at 2:46 pm

Ooops, one too many zeros…

$6,000,000,000 http://talkingpointsmemo.com/livewire/omb-shutdown-cost-gdp-2-6-million-in-4th-quarter-output

$24,000,000,0000 is probably BS as well.

afmajret December 8, 2013 at 9:42 pm

It’s all BS. The furloughed govt workers got paid for the entire shutdown, despite not working, and the rest is all smoke and mirrors. Not a penny that was programmed to be spent didn’t eventually get spent. If federal government agencies were held to the same accounting standards as private businesses, there might be a way to estimate what a shutdown cost or didn’t cost, but public accounting is incomprehensible, and so we’ll never know. Fifteen years of DoD budgeting cycles taught me that much.

euwe max December 6, 2013 at 2:05 pm

The Council of Economic Advisers has estimated that the combination of the shutdown and debt limit brinksmanship resulted in 120,000 fewer private sector jobs created during the first two weeks of October, the shutdown cost the Federal government billions of dollars,

Federal employees were furloughed for a combined total of 6.6 million days,

Federal permitting and environmental and other reviews were halted, delaying job-creating transportation and energy projects.

Import and export licenses and applications were put on hold, negatively impacting trade.

Federal loans to small businesses, homeowners, and families in rural communities were put on hold.

Private-sector lending to individuals and small businesses was disrupted, because banks and lenders couldn’t access government income and Social Security Number verification services.

Travel and tourism was disrupted at national parks and monuments across the country, hurting the surrounding local economies.

Hundreds of patients were prevented from enrolling in clinical trials at the National Institutes of Health.

Almost $4 billion in tax refunds were delayed.

Agencies from the Food and Drug Administration to the Environmental Protection Agency had to cancel health and safety inspections, while the National Transportation Safety Board was unable to investigate airplane accidents in a timely fashion.

Critical government-sponsored scientific research was put on hold. Notably, four of the five Nobel prize winning scientists who work for the Federal government were furloughed during the shutdown.

The shutdown followed a three-year pay freeze for Federal employees, cuts in training and support, and, for hundreds of thousands of workers, administrative furloughs earlier this year because of sequestration. These cuts will make it harder for the government to attract and retain the talent it needs to provide top level service to the American people.

24 billion.

That’s according to an estimate from Standard & Poor’s. The financial services company said the 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.

Hey, for the cost of 120 jobs and 24 million dollars, it’s a steal! – uh.. oops! $24 BILLION… ok..ok… sheesh!

well, not really a steal… because in this case, none of the captains of industry got their cut.

nitrat December 6, 2013 at 2:34 pm

If there was any positive effect, it must have been the business community woke up to the fact that the GOP is stark, raving mad and if those businessmen want their businesses to survive they better start priming the economy with new jobs themselves ’cause the GOP is going to cut them off at the knees any way they can if there is one tiny little chance it might make Obama look bad.

idcydm December 6, 2013 at 5:05 pm

The only thing the shutdown did was keep Obamacare out of the headlines for awhile. I’d just about bet the President wishes it was still shutdown, considering the beating he’s taking over Obamacare. Pretty bad when the President has to beg millennials to push his plan.


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