Output is expected to spring back once the government reopens and services resume, reversing most of the economic slowdown. But the hours lost by furloughed federal workers would permanently impact real GDP — an effect that would get worse the longer the shutdown drags on.
“In CBO’s assessment, the shutdown will delay federal spending and have a negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends,” CBO director Phillip Swagel wrote in a letter to House Budget Chairman Jodey Arrington (R-Texas), who requested the analysis….
…
If the shutdown ends after six weeks — which would be around Nov. 12 — the economy would permanently lose $11 billion in GDP by the end of 2026. That loss would grow to $14 billion if the shutdown lasts until the end of November….
Leave a Reply
You must be logged in to post a comment.