Mark Zandi, chief analyst of Moody's Analytics, said early on the cost would be $55 billion for a one-month shutdown including direct and indirect costs. When 400,000 civilian employees of the Defense of Defense were called back to work, he lowered that to $50 billion.
On the other hand, market research firm IHS Inc. put losses at $160 million day, or about $5 billion for a month-long shutdown.
Goldman Sachs Group Inc. said a month-long shutdown would shave 0.5 percent off fourth-quarter growth in gross domestic product, reducing it to 2.0 percent.
Website OutlineUSA, which boasts no special economic knowledge and takes its information from accounts at news outlets, is keeping a second-by-second running total at shutdowncost.com. As exact as the count appears—the tally when this was written had hit $4.708 billion—it is at best a crude guesstimate.
The 27-day shutdown in 1995-1996 cost the US economy over $2.1 billion in today's dollars, according to the Office of Management and Budget Data.
The reason Zandi's estimate is so huge is that it includes indirect costs. That's a reasonable approach but devilishly hard to quantify. Zandi predicted there would be a slow-down in housing loan originations, which has happened, and there would be severe hits to the stock market, which there haven't been.
Not only are estimates of indirect costs inevitably fuzzy, many of the losses will also almost certainly be covered once the government is fully up and running again.
On other hand, lost wages for many private-sector employees dependent on government spending will not be made up. The CEO of Ridgewells Catering, whose subsidiary CapitalHost is the exclusive caterer for the House of Representatives, says the company has lost about $200,000 from the shutdow so far. More than 60 employees have been furloughed by Ridgewells.
Even if the feds open the doors Thursday, some damage is ongoing. See below the fold:
But, assume for a moment Zandi is right. If the shutdown is terminated late Wednesday when Congress finally votes, as it is expected but not yet scheduled to do, would that mean a $25 billion or so price-tag on the shutdown? Zandi himself says the effects of the shutdown would get worse the longer the government didn't open its doors. So, $20 billion? $15 billion?
The S&P today put it at $24 billion:
The S&P has cut the annualized U.S. growth view closer to 2% from 3%, Bloomberg is reporting.Unfortunately, we can't garnish the wages of the 32 Republicans and their enablers like Speaker John Boehner who were the force behind the shutdown such as enablers like House Speaker John Boehner, for example.
The ratings agency — which recognizes the Senate deal will be approved — says that the shutdown has taken $24 billion out of the economy and cut 0.6% off of yearly fourth quarter GDP growth.
Here are some more examples of the impact of the shutdown:
• Some states are seeing a large rise of first-time unemployment compensation claims. Although the total won't be announced until Thursday, the numbers will be considerably above previous weeks. There is a separate count for federal employees who have been furloughed. Maryland officials has seen some 20,000 initial applications for unemployment compensation from federal workers in the past two weeks. Normally, they see 2,500 to 3,000 a year.
• Consumer confidence, which plummeted when the shutdown began, has led to a decrease in spending. Exactly how much is bound to remain blurry. But the drop may cut October new-vehicle sales by as much as 10 percent, according to John Krafcik, chief executive officer of Hyundai Motor Co.’s U.S. sales unit.
• In Florida, state revenues may have been hurt by the shutdown. A report by a business-oriented think-tank. But it presents no hard figures, merely the assertion that millions in tax revenues will be lost.
• Eighty fishing-boat captains docked in Dutch Harbor, Alaska, would normally be out gathering King Crabs right now during the short catch season. Instead, they're awaiting federal permits, which they obviously can't get until there are employees to approve them. The cost: An average of $1,000 lost each day per boat. Not only are they losing money, each day they aren't out is another for the Russian fishing fleet to corner the market.