Politics

Trump’s government shutdown is costing the economy at least $1.2 billion per week

WASHINGTON, DC - MARCH 07: Chairman of the Council of Economic Advisers Kevin Hassett waits for the beginning of a hearing before the Joint Economic Committee March 7, 2018 on Capitol Hill in Washington, DC. The Joint Economic Committee held a hearing to focus on "The Economic Report of the President." (Photo by Alex Wong/Getty Images)
Kevin Hassett

White House Council of Economic Advisers chair Kevin Hassett says that “I don’t really expect to see big economic effects of this [government shutdown] … assuming that it ends relatively quickly.” By that, he meant that the shutdown is costing the U.S. economy a mere $1.2 billion per week. Other analysts aren’t as optimistic.

JPMorgan’s Michael Feroli estimates the shutdown’s effects as being two to four times what Hassett forecast. It’s also early days now, going by Donald Trump’s threats about keeping things shut down for months or years, and “each month that it goes forward, the effect grows exponentially,” according to Bank of America Merrill Lynch’s Ethan Harris. “If it goes on for a quarter … now you’re starting to really change spending habits.”

Fitch Ratings warned of possible damage to the federal government’s credit rating, not just because of broader political turmoil: “The main implication for our U.S. sovereign credit view will depend on whether we feel this shutdown foreshadows a more pronounced destabilization of fiscal policymaking, including brinkmanship over the debt limit.”


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