This month's federal government shutdown didn't just have a psychic impact, it cost America billions of dollars. (Alex Brandon / AP)
We thought Congress had learned the foolishness of forcing a government shutdown in 1995-96. Apparently not.
Now the country has taken a $24 billion hit to its economic growth to teach that same lesson to congressional radicals, mostly House Republicans, who were too young or too obtuse to learn it the last time around.
The ratings agency Standard & Poor’s estimated the shutdown knocked 0.6 percent off gross domestic product growth through lost economic output; the S&P reduced its estimate of annualized economic growth in the fourth quarter by a full percentage point, from 3 percent to 2. Moody’s Analytics was slightly more optimistic. It estimated the hit to GDP would be only $23 billion.
Either way, the final cost is likely to be even higher as scattered reports of the economic damage begin to come in.
In the area at the shutdown’s epicenter, the District of Columbia and Maryland lost a combined $21 million a week in sales taxes. That number will worsen when Virginia tallies up its damage.
The U.S. Travel Association estimated that $2.4 billion in travel spending was lost.
The National Park Service estimated it was losing $450,000 a day, although that was mitigated in a few cases where states stepped in to fund parks on which local businesses heavily depend.
The National Retail Federation is expecting only marginal sales gains of 3.9 percent, to $602 billion, during the November and December holidays — a critical period for many small businesses.
We’ll have a better fix on the damage when a dozen or so government economic reports resume publication. Those include reports on employment, retail sales and inflation.
There are two more opportunities on the near horizon for another shutdown: in December, when the resolution ending the shutdown must be renewed, and in January, when the government’s borrowing limit must be raised.
Dale McFeatters writes
for the Scripps Howard News Service.