I think there’s a notion out there, expressed on the right, that shutting down a bunch of government functions that they don’t like anyway has benefits in and of itself, and furthermore it saves the government cash in the short run. But that’s actually not true.
“There is absolutely no way this saves money. Zip,” said Bo Cutter, former director of the National Economic Council and a senior fellow at the Roosevelt Institute […]
First, the government actually has to spend money in order to complete an orderly shutdown.
“When you have to shut something down, that costs money, and ramping something back up costs money,” Jeffrey Zients, deputy director of the Office of Management and Budget said Thursday.
Imagine a government construction project. Since it’s impossible to know how long the shutdown will last, workers are forced to wind down all operations and secure the work site. That all costs money.
There are work orders in the thousands of dollars just to put up a little “the government is shut down and so is this website” message on government portals. And that’s merely one kind of ramp-up project. The longer the shutdown, the greater the costs. Who will pay for that? Then there’s all the lost user fees at places like national parks, a loss of millions of dollars in revenue every day. Then there’s the probability that furloughed workers will get back pay for their time off during the shutdown, but then get overtime for plowing through work piled up during the shutdown. It’s a total mess.
And then there are the knock-on costs.
Among the people anxiously waiting to hear if Congress can reach a budget deal are front desk clerks at the Ahwahnee Hotel in Yosemite National Park, manufacturing executives whose companies supply goods to federal agencies, bank loan officers who make mortgages guaranteed by the Federal Housing Administration and Wall Street analysts who depend on a steady flow of government data.
The federal government is, after all, a very big business, and temporarily pulling the plug would disrupt many other businesses.
I know private businesses are controlled by Galtian Supermen who don’t need the federal government pushing them on the road to serfdom, but in reality, they require federal spending and contracting to turn a profit. Just taking 800,000 paychecks out of the economy temporarily would have an enormous effect on consumer spending in the near-term, whether or not they all get back pay in the aftermath. The last government shutdown, in winter 1995, knocked a full point off of GDP in that quarter, according to many analysts.
It’s just a terrible, terrible outcome, and you’d think it would be avoided at all costs, especially when the showdown is over lady parts.