Economic impacts of the shutdown

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The question of how the government shutdown will impact the U.S. Economy is not an easy one to answer… in fact;

“That’s a very complex and difficult question,” explains Dr. James Scarry, Assistant Professor of History at Waldorf College.

And while coming up with an exact figure is a shot in the dark, it’s easier to look at who will feel the brunt of the shutdown.

“The people who are laid off or furloughed from their government jobs at least during the time frame of the shutdown are going to feel it most severely,” says Scarry.

But it not just those “non-essential” government employees that will be affected, but also those who rely on a steady flow of visitors to state parks and monuments.

“Vendors, restaurants nearby, hotels so on and so forth, their business is going to fall off,” he continues.

Many people are also wondering how the stock markets will be impacted. On Monday night, the markets took a dip, but by midday Tuesday they were up, which could put a damper on hopes of a short shutdown.

“The markets being okay today, it’s kind of playing into the republicans, “let’s push this deal a little bit further,” If the markets were down sharply today I think we’d have a faster resolution coming but right now I think it’s probably going to drag on for a couple more days,” says Casey Martin, Senior Vice President of Investments at Raymond James.

But martin says that sort of reaction on Wall Street won’t last too long.

“The markets will tell them when to get back and come to a resolution so the market will not put up with that.”

Regardless of how long the shutdown lasts, Dr. Scarry fears the impacts will go beyond the dollar signs.

“Overall attitudes about the government, our trust in the government our trust in our political system and its leaders.”

The Office of Management and Budget estimated that if this shutdown lasts as long as the nearly month-long shut down did in 1995 and 1996 it could cost well over 2 billion dollars.

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