The price of political incompetence? About $300 million per day.
That’s how much a government shutdown will cost the U.S. in lost economic output, according to an analysis from IHS Global Insight. As Bloomberg notes, that’s less than a fraction of a percent of nation’s $15.7 trillion economy, but it’s not an insignificant amount of money.
To put that in perspective: $300 million is about what Beyoncé is worth. It's also about equal to the cost of 65.8 million Big Macs, the profits from the first Hunger Games movie and about $50 million less than Amazon CEO Jeff Bezos paid for The Washington Post earlier this year.
And while Congressional paralysis eats away at the economy, as many as 800,000 federal workers may lose their paychecks while those responsible for the shutdown will keep earning their cozy salaries.
Congress failed to pass a continuing resolution early Tuesday morning to temporarily fund the government as House Republicans insisted the bill include provisions that would delay portions of President Obama’s health care reform law, which launches today. Senate Democrats refused to pass any proposals that would threaten Obamacare. As a result, non-essential federal workers are off the job and national parks, NASA and other agencies are pretty much closed.
If the shutdown lasts for longer than a few days, the U.S. could face major economic consequences. IHS economists say they’ll reduce their forecast for fourth quarter economic growth from 2.2 percent to 2 percent if the shutdown lasts for more than a week. The Office of Management and Budget found the two major shutdowns in the 1990s cost the government about $1.4 billion or $2 billion in today’s inflation-adjusted dollars, according to the Washington Post’s Ezra Klein.
And that’s likely a conservative estimate. The CBO figures leave out things like the slower pace of IRS audits, national parks’ missed revenue and the possibility that government contractors could increase their fees as a result of the uncertainty, according to WaPo.
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