The government shutdown will
cost the American economy $300 million a day, according to one estimate—and that's just for starters. If House Republicans refuse to pass a clean continuing resolution, keeping the government shut down, the costs will go up.
While that is a small fraction of the country’s $15.7 trillion economy, the daily impact of a shutdown is likely to accelerate if it continues as it depresses confidence and spending by businesses and consumers.
Lexington, Massachusetts-based IHS, a global market research firm, estimates that its forecast for 2.2 percent annualized growth in the fourth quarter will be reduced 0.2 percentage point in a weeklong shutdown. A 21-day closing like the one in 1995-96 could cut growth by 0.9 to 1.4 percentage point, according to Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia.
And at the current weak growth levels, we really, really cannot afford for a shutdown to hold back the economy in that way, just as the furloughed government workers will have trouble making ends meet without their paychecks. Meanwhile, the Republican members of the House who caused the shutdown will continue getting their own paychecks.