A Long Shutdown Would Seriously Hurt Economic Growth

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Via Dylan Matthews, here’s a chart that summarizes some of the leading estimates of the cost of a government shutdown. A brief shutdown (in blue) wouldn’t do too much damage. But a longer shutdown (in green) would. The average of the five estimates is that it would reduce fourth quarter GDP by about 1 percentage point. As CRFB points out, estimates of fourth quarter growth are only a little above 2 percent right now, so this would be a big hit.

Think about this. Without any headwinds, fourth quarter GDP growth would probably clock in around 3 percent or so. The sequester has already cut that down to about 2.3 percent. A long shutdown could cut it further to 1.3 percent. If this happens, it means that Republican economic folly will have reduced economic growth in the fourth quarter by half or more. Thanks, Republicans!

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