Economic impact of shutdown: Damage would increase with duration

By Peter Whoriskey and Howard Schneider,
WashPost
Wednesday, April 7

The economic effects of a government shutdown could be significant in the Washington region and nationally if the impasse continues for several weeks, some economists said.

The impact would depend on the closure’s duration and on whether furloughed federal employees were eventually paid for their time out of work, as they were after the last shutdown, 15 years ago. If the estimated 800,000 workers did not receive back pay, the damage would be compounded as many families pulled back on spending, economists said.

Initially, however, if the government closes Friday, the effects are expected to be relatively minor, felt largely by tourists shut out of such attractions as the Smithsonian museums, the National Zoo and the national parks — and by the hotels and restaurants that depend on them.

“If it’s shorter than a week, the economic impact is no worse than a snowstorm,” said Stephen Fuller, director of the Center for Regional Analysis. “If it lasts longer, it will have negative consequences on the economy and not all of the losses will be recovered.”

(More here.)