- The partial government shutdown, now in its second month, could cost the US economy in excess of $US6 billion by the end of this week.
- The figure, projected by a chief economist at S&P Global, would surpass the $US5.7 billion in border-wall funding that prompted the shutdown.
- The shutdown began December 22 after Democrats rejected President Donald Trump’s demand that any legislation for funding the federal government must include money for the wall.
- As the record-breaking shutdown drags on, projections about the damage it is causing are becoming more and more alarming.
The record partial government shutdown could cost the US economy more than the $US5.7 billion that President Donald Trump has demanded to fund his proposed border wall.
Beth Ann Bovino, the chief US economist for S&P Global, estimated in a research note on January 11 that every week of the shutdown would shave about $US1.2 billion off the US’s gross domestic product.
The US is now in an unprecedented fifth week of the shutdown. According to this projection, by about Friday the total damage will have surpassed the $US5.7 billion that prompted the shutdown in the first place.
Bovino also estimated that the amount of damage done each week would increase as the shutdown continued. “The longer this shutdown drags on, the more collateral damage the economy will suffer,” she wrote.
Given this effect – which Bovino did not quantify – the psychologically significant $US5.7 billion figure could be reached sooner.
The shutdown started December 22 after Democrats refused President Donald Trump’s demand that a spending bill to keep the government open include $US5.7 billion in funding for a wall along the southern US border.
Democrats rejected Trump’s offer of a compromise deal on Friday. It offered temporary protection for undocumented immigrants brought to the United States as children, known as Dreamers, as well as other groups of immigrants in exchange for wall funding.
House Speaker Nancy Pelosi called the deal “unacceptable,” while Senate Minority Leader Chuck Schumer described Trump’s strategy as “hostage-taking.”
As the shutdown continues, more economists are warning of a doomsday scenario.
For now, the economy is still expected to keep growing, but JPMorgan CEO Jamie Dimon described the shutdown as a serious problem for the US economy, citing research that found US GDP growth could plummet to zero if the shutdown continued.
A White House official told INSIDER last week that the Trump administration’s own model estimated the shutdown would eat 0.13 percentage points of GDP growth for every week of the shutdown – higher than the 0.05 percentage points originally assumed.
The TSA is in chaos, schools lunches are under threat, and the national parks are overflowing with trash
- More than 3,000 airport security screeners, or 1 in 10, missed work over the holiday weekend. Transportation Security Administration officials said the rate was almost triple what it was on the same day last year.
- Schools are worried about being able to feed children their lunches if the shutdown continues. At least one school district is already cutting back on children’s meals, forgoing new bottled water and juice and reducing the amount of fruit and vegetables given to children.
- Critics of Trump’s latest proposal to reopen the government say his solution isn’t a compromise at all, and point out that Trump was the one who rescinded protections for Dreamers.
- National parks are struggling, facing piles of trash and damaged trees.
- Secret Service agents are working with no pay, and some say they are finding it hard to make ends meet and that financial worries could affect performance on the job.
- Cybersecurity experts say the shutdown is putting the US is at greater risk of attack.
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