US SHUTDOWN TO COST MORE THAN BORDER WALL, ECONOMISTS SAY
The longest US government shutdown in history may soon cost more than the border wall that politicians are squabbling about, economists said on Saturday.
“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 Agence FrancePresse (AFP).
Butterfly effect
“Think of it as a butterfly effect,” Bovino said, adding that the length of the shutdown made it harder to say just how bad the impact could get.
With about a quarter of the federal workforce affected, the shutdown is squeezing an estimated $1.2 billion a week out of the economy, Bovino said, but that could grow if it dragged on.
As time goes by
At the current rate, within two weeks it will have cost America more than the $5.7 billion US President Donald Trump is demanding for the border wall with Mexico that caused the shutdown.
Following extended closures in 1995 and 2013, the US economy continued to grow while stock markets mainly went sideways.
But the $4-trillion federal budget is felt in the daily lives of all Americans, well beyond the 800,000 government workers who missed their first paychecks for the year on Friday.
“The tentacles start to touch many avenues of life and that’s a very sad thing,” Bovino said.
$200 million daily
Bloomberg news service estimated that government contractors had lost $200 million daily.
Tourism at the country’s 400 national parks normally generates a reported $18 million a day, excluding the earnings of restaurants, hotels and shops around the parks.
The 380,000 federal workers who have been furloughed and the 420,000 who are working without paynowowe an estimated $438 million a month in rent and mortgage payments, according to the real estate firm Zillow.
“It’s possible that the effects will be greater,” University of Chicago economist Constantine Yannelis.
“The longer a shutdown lasts, the more persistent a change in habits you could see,” he said.