Shutdown’s Economic Damage Starts to Pile Up, Threatening an End to Growth

HayJenn

Moderator
Jul 2014
65,249
53,635
CA
#1
WASHINGTON — The partial government shutdown is inflicting far greater damage on the United States economy than previously estimated, the White House acknowledged on Tuesday, as President Trump’s economists doubled projections of how much economic growth is being lost each week the standoff with Democrats continues.

The revised estimates from the Council of Economic Advisers show that the shutdown, now in its fourth week, is beginning to have real economic consequences. The analysis, and other projections from outside the White House, suggests that the shutdown has already weighed significantly on growth and could ultimately push the United States economy into a contraction.

While Vice President Mike Pence previously played down the shutdown’s effects amid a “roaring” economy, White House officials are now cautioning Mr. Trump about the toll it could take on a sustained economic expansion. Mr. Trump, who has hitched his political success to the economy, also faces other economic headwinds, including slowing global growth, a trade war with China and the waning effects of a $1.5 trillion tax cut.

Mr. Hassett said on Tuesday that the administration now calculates that the shutdown reduces quarterly economic growth by 0.13 percentage points for every week that it lasts — the cumulative effect of lost work from contractors and furloughed federal employees who are not getting paid and who are investing and spending less as a result. That means that the economy has already lost nearly half a percentage point of growth from the four-week shutdown. (Last year, economic growth for the first quarter totaled 2.2 percent.)

Shutdown’s Economic Damage Starts to Pile Up, Threatening an End to Growth


When your own economic advisors put out numbers that are brutal. Self-made disaster.
 
Likes: BigLeRoy
Jan 2016
50,039
46,001
Colorado
#2
Mr. Trump, who has hitched his political success to the economy, also faces other economic headwinds, including slowing global growth, a trade war with China and the waning effects of a $1.5 trillion tax cut.

Yeah. Yeah, and I've been writing here about this stuff for a long time. Trade wars are NEVER good for economic growth. NEVER. And yes, economic growth is slowing around the entire world. Japan and Germany may be both on the brink of recession, and they're the 3rd and 4th largest economies in the world, respectively. China, the 2nd largest economy, is in an abrupt slowdown. The government of the largest economy, America, is shutdown, with no end in sight. The risk of a very dangerous no deal BREXIT in Britain, the 5th largest economy, is growing by the day. Protests in France, dangerously high debt levels in Italy, a possible nut-case taking over in Brazil.

Ruh-roh.
 

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