News / USA

US Economists: Billions Lost in Government Shutdown

VOA News
U.S. analysts say that the government's 16-day partial shutdown cost the American economy billions of dollars and that continuing uncertainty about government actions could hurt the economy even more.

The full economic impact of the shutdown has yet to be counted and estimates vary. But the Standard & Poor's credit rating firm said it took at least $24 billion out of the American economy, the world's largest, and slowed the country's economic growth rate. Another research company, Macroeconomic Advisers, put the damage at about $12 billion.

U.S. President Barack Obama delivers remarks on the end of the government shutdown at the White House in Washington, Oct. 17, 2013.U.S. President Barack Obama delivers remarks on the end of the government shutdown at the White House in Washington, Oct. 17, 2013.
x
U.S. President Barack Obama delivers remarks on the end of the government shutdown at the White House in Washington, Oct. 17, 2013.
U.S. President Barack Obama delivers remarks on the end of the government shutdown at the White House in Washington, Oct. 17, 2013.
President Barack Obama said Thursday the impasse over government spending and the country's borrowing authority "inflicted completely unnecessary damage" on the American economy.

"These last few weeks have inflicted completely unnecessary damage on our economy," he said. "We don't know yet the full scope of the damage, but every analyst out there believes it's slowed our growth."

While 800,000 furloughed government workers are going to be paid back wages, economists say some businesses affected by the shutdown will not be able to recoup their losses.

The shutdown forced the closing of national parks, costing nearby businesses when customers canceled vacations. Other businesses and farmers were unable to get government approval for loans, or had to pay higher interest rates on short-term bank loans.

The chief economist at the country's largest bank, James Glassman at JPMorgan Chase, told VOA there will be economic losses, but that for many furloughed government employees, the coming days will be like returning from a vacation.

"I think probably the impact is more the uncertainty it created across the country in terms of businesses that have contracts with government," he said. "But the truth is, a couple weeks off everything's flowing again. It won't take long to get back to work and catch up on some of the work that was lost."

The Washington settlement only covers government spending through January 15 and extends the government's borrowing authority through February 7. S&P said the short-term deal - and the possibility of another standoff in a few months, could weigh on consumer confidence during the holiday shopping season in November and December.

S&P said consumers may "remain afraid to open up their checkbooks."

Economist Joel Prakken at Macroeconomic Advisers says the U.S. has lurched from one financial crisis to the next over the last several years, costing the country about one percentage point of economic growth annually since late 2009. The U.S. has had to repeatedly increase it borrowing limit because the government spends more than the amount of revenue it takes in through taxes and other fees.

"We have a measure of policy uncertainty that since 2009 has been quite elevated relative to the previous quarter of a century," he said.

Prakken attributes Washington's budget disputes to a long-running debate over the role of government in American life, how big it should be and what it should do.

You May Like

At International AIDS Conference One Goal, Many Paths

The 12,000 delegates attending 20th International AIDS Conference in Melbourne have vastly different visions about how to eradicate disease More

Disasters May Doom Malaysia’s Flag Carrier

Even before loss of two jets loaded with passengers on international flights, company had been operating in red for three years, accumulating deficit of $1.3 billion More

Afghan Presidential Vote Audit Continues Despite Glitches

Process has been marred by walkouts by representatives of two competing candidates, Abdullah Abdullah and Ashraf Ghani More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

AppleAndroid