The longer the partial government shutdown continues, the tougher it is for the roughly 800,000 unpaid federal workers and an estimated half million unpaid federal contractors to make ends meet. Yet those in the private sector are being hurt, too, and to a much greater extent than the Trump administration had previously acknowledged.
This week, the president’s Council of Economic Advisers estimated the shutdown was slowing the U.S. economy by about one-eighth of 1 percent per week. That may not sound like much, but the effect is twice as great as the White House had previously suggested. Economists had projected growth to be anemic in the first quarter of 2019 even without a shutdown; if the impasse continues for another month or so, the economy could actually start to contract.
Standard & Poor’s put the shutdown’s cost to the U.S. economy at about $1.2 billion per week. At that rate, by the end of next week the shutdown will have cost the economy more than President Donald Trump has demanded for the longer, taller wall he wants along the Southern border — and for which he has kept much of the government shuttered.
That a prolonged shutdown could damage the economy should come as no surprise, considering that federal spending makes up 20 percent of the United States’ gross domestic product. Granted, much of that spending — including Social Security benefits, the military budget and Medicare — isn’t affected by the shutdown. But because of the sheer number of agencies, programs and contracts all across the country that have been cut off from the Treasury, the effects ripple far and wide as paychecks aren’t received or spent on food, clothing, entertainment, supplies and services.
The shutdown is just one of the headwinds blowing against the economy. The trade fights Trump has picked with much of the rest of the industrialized world are throwing sand in the global gears, contributing to a slowdown in such economies as China and Germany. Slower growth overseas typically means fewer U.S. exports and less growth at home. Meanwhile, the forces that had been boosting our economy — the new federal tax cut, high consumer confidence, a powerful bull market and exceptionally low interest rates — are petering out or, in the case of interest rates, reversing.
The president has taken obvious pride in the uptick in economic growth during his time in office. The shutdown threatens to end that growth. Trump should agree to end the shutdown and carry on his idiotic fight for a wasteful, ineffective wall project without inflicting so much collateral damage on the U.S. economy.
FROM AN EDITORIAL IN THE LOS ANGELES TIMES