US shut­down tak­ing grow­ing bite out of world’s largest econ­omy: Econ­o­mists

US shut­down on Satur­day be­came the long­est in his­tory

The Hitavada - - 2ND FRONT PAGE -

WASH­ING­TON, Jan 13 (AFP)

THE US Gov­ern­ment shut­down on Satur­day be­came the long­est in his­tory and is tak­ing a grow­ing bite out of the world’s largest econ­omy with each pass­ing day, econ­o­mists say.

While most of the 21 “lapses” in Gov­ern­ment spend­ing since 1976 left barely a scratch on eco­nomic growth, the length of this shut­down makes it harder to say just how bad the im­pact could get.

“It’s not a hard stretch to say that ini­tially it’s smaller and then it ex­pands, the pain starts to widen,” Beth Ann Bovino, Chief US economist at S&P Global Rat­ings, told AFP. “Think of it as a but­ter­fly ef­fect.”

With about a quar­ter of the fed­eral work­force af­fected, the shut­down is cur­rently squeez­ing an es­ti­mated USD 1.2 bil­lion a week out of the econ­omy, Bovino said, but that fig­ure could grow if it drags on.

At the cur­rent rate, within two weeks it will have cost Amer­ica more than the USD 5.7 bil­lion US Pres­i­dent Don­ald Trump is de­mand­ing for a wall on the bor­der with Mex­ico, the dis­pute with Con­gress that led to the fail­ure to pass fund­ing for Gov­ern­ment op­er­a­tions.

Fol­low­ing ex­tended clo­sures in 1995 and 2013, the US econ­omy con­tin­ued to grow while stock mar­kets mainly went side­ways.

And GDP growth lost in one quar­ter can re­bound in the next as the Gov­ern­ment springs back to life and work­ers re­coup lost salaries. But some losses can never be re­cov­ered.

(AFP)

The de­serted Ter­mi­nal G se­cu­rity check point area of the Mi­ami In­ter­na­tional Air­port on Satur­day due to US Gov­ern­ment shut­down now in its 22nd day.

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