The longest government shutdown in history may have ended, but its damage to the economy is far from over.
Throughout the 35-day shutdown prompted by President Trump's demand for border wall funding, 800,000 federal employees went unpaid and six government departments went unfunded. That cost the American economy $11 billion, $3 billion of which will never be recovered, an analysis released Monday by the Congressional Budget Office reveals.
The nonpartisan CBO calculated that the shutdown caused a federal discretionary spending to drop $18 billion in a little over a month. That led the GDP in the last quarter of 2018 to drop by $3 billion, or .1 percent. The GDP in the first quarter of 2019 is then expected to drop another $8 billion, or .2 percent, per the report. That GDP drop will mostly rebound by the end of fiscal year 2019, but an estimated .02 percent of America's annual GDP will not , the CBO says.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Beyond the impact of federal government spending losses, the CBO also noted "much more significant effects on individual businesses and workers." About 800,000 federal workers didn't receive paychecks for five weeks, and federal contractors won't receive any at all. That caused them to spend less at "private-sector entities," some of which "will never recoup that lost income," the report says.
A separate CBO economic outlook report released Monday also found that, if taxation and spending remains unchanged, the federal deficit will grow to an annual total of $1 trillion in next decade. Read more about it at The Week.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.