True Costs Of The GOP Shutdown–Beyond The $24 Billion

It’s actually $24 billion, and still counting, but there is lots more damage than that.

…economists said that the intransigence of House Republicans would take a bite out of fourth-quarter growth, which will affect employment, business earnings and borrowing costs. The ripple from Washington will be felt around the globe…

Moreover, this latest budget impasse came after years of similar episodes, and the economic ramifications have accumulated over time, analysts say. A new report from Macroeconomic Advisers, prepared for the Peter G. Peterson Foundation, estimates the costs of the fiscal uncertainty of the last few years. Its model suggests that uncertainty since late 2009 has increased certain corporate borrowing costs by 0.38 percentage point; lowered economic growth over that period by 0.3 percent a year, costing at least $150 billion in lost output; and left this year’s unemployment rate higher by 0.6 percentage point. That translates to 900,000 jobs lost…

Residential real estate, which has been one of the brightest points of the recovery, suffered. An index of sentiment among home builders fell in October from a month earlier, according to data released on Wednesday from the National Association of Home Builders. The decline was greater than analysts had expected. One cause for the decline is that the approval process for government-backed mortgages has slowed with the shutdown.

The damage to business has been intensified by the timing of the shutdown. “We’re in budget planning for 2014, so it casts a pall,” said John Selldorff, who runs the American operations of Legrand, a global manufacturer of electrical and data products based in France. “We are definitely pausing and being more careful.”

By: Alan

Alan Colmes is the publisher of Liberaland.