Government Shutdown Could Cost $7B Weekly, Cuts Loom Ahead

 

 

The ongoing U.S. government shutdown is shaping up to be one of the most financially damaging in history. According to EY-Parthenon chief economist Gregory Daco, each week the federal government remains closed could drain $7 billion from the economy and reduce GDP growth by 0.1 percentage points. The hit comes from unpaid federal workers, delayed government spending, and weaker consumer demand.

 

While some of the economic losses may be recouped once operations resume — as furloughed employees receive back pay — experts warn that not all damage is reversible. The 2018–2019 shutdown, the longest on record at 34 days, cost the U.S. economy roughly $11 billion, with $3 billion in permanent losses, according to the Congressional Budget Office (CBO).

 

Beyond lost output, shutdowns undermine public confidence. During the 2019 standoff, the University of Michigan’s Consumer Sentiment Index suffered its sharpest monthly decline since 2012. Agencies also lose user fees, such as national park revenue and federal permit charges, while taxpayers ultimately cover billions in back pay. A 2019 Senate report estimated the last three shutdowns cost nearly $4 billion, mostly from compensation for furloughed employees.

 

This shutdown, however, may be different. President Donald Trump, Vice President JD Vance, and OMB Director Russell Vought have signaled they intend to use the crisis to push permanent cuts. The administration has already frozen or slashed billions in federal projects, including $18 billion in New York City infrastructure spending and multiple climate initiatives in Democratic-leaning states. Vought has warned lawmakers that Reduction in Force (RIF) layoffs will begin within days if the shutdown persists.

 

Trump has called shutdowns “a good thing,” suggesting the current standoff could allow Republicans to eliminate federal workers and programs long opposed by his administration — changes he described as “irreversible.”

 

Key Takeaways

• Each week of the shutdown could cost the U.S. $7 billion in lost growth.

• Past shutdowns show permanent damage, including $11B lost in 2018–19.

• Trump signals possible layoffs and permanent cuts during the standoff.

 

🔗 Read the original source

 

 

 

Trump is doing a great job in destroying the USA.

 

His billionaire buddies will be elated, until they realize their wealth will be declining.

 

And maybe the MAGA mob will be troubled when they find that the services they need are no longer available.

 

Carn't fix stupid.

9 minutes ago, JimHuaHin said:

Trump is doing a great job in destroying the USA.

 

His billionaire buddies will be elated, until they realize their wealth will be declining.

 

And maybe the MAGA mob will be troubled when they find that the services they need are no longer available.

 

Carn't fix stupid.

We can't fix you.  The Democrats voted against keeping the government funded.  

20 minutes ago, JimHuaHin said:

Trump is doing a great job in destroying the USA.

 

His billionaire buddies will be elated, until they realize their wealth will be declining.

 

And maybe the MAGA mob will be troubled when they find that the services they need are no longer available.

 

Carn't fix stupid.

The media has left you a broken impression of reality.

37 minutes ago, Mike_Hunt said:

The Democrats voted against keeping the government funded.  

Classic partisan spin you've been duped by. The GOP-backed "clean" stopgap bill Democrats largely rejected maintains current funding levels through November 21 but excludes an extension of popular Affordable Care Act premium subsidies set to expire in December, which could spike health insurance costs for over 22 million Americans. Democrats view this as a non-starter without negotiation on those subsidies (even as polls show majority GOP support for extending them), while Republicans insist on passing the clean bill first to reopen government before debating add-ons or reforms. It's classic partisanship, technically accurate on the vote, but ignores the broader health care stakes. The only losers here are the entire nation.

Just now, Hamus Yaigh said:

Classic partisan spin you've been duped by. The GOP-backed "clean" stopgap bill Democrats largely rejected maintains current funding levels through November 21 but excludes an extension of popular Affordable Care Act premium subsidies set to expire in December, which could spike health insurance costs for over 22 million Americans. Democrats view this as a non-starter without negotiation on those subsidies (even as polls show majority GOP support for extending them), while Republicans insist on passing the clean bill first to reopen government before debating add-ons or reforms. It's classic partisanship, technically accurate on the vote, but ignores the broader health care stakes. The only losers here are the entire nation.

It's not spin.   This was a clean bill to keep the government open at the current funding levels.   These subsided were met to be temporary.   Really, this proves the ACA is a total failure.   The prove with the dem is they keep increasing government spending.   currently it's at 23% of the GDP.   

2 minutes ago, Hamus Yaigh said:

The only losers here are the entire nation.

The losers are the young people.  They are ones who pay the bill for this debt. 

3 minutes ago, Mike_Hunt said:

The losers are the young people.  They are ones who pay the bill for this debt. 

The bill we be tiny. In 2018, the longest shutdown in history, it cost around 3 billion.  The article is silly and if you read it, you would grasp this reality.  In the end it might be a positive, if spending is cut.  Something has to give and raising taxes doesn't seem like something this administration has any intention of doing.  Weird times and I wonder how much longer advanced societies can kick the debt can down the road.

33 minutes ago, Hamus Yaigh said:

The only losers here are the entire nation.

The nation and other nations have been losing since the financial crisis without even knowing it.  Societies are flush in cash that are in turn invested in assets that are in high demand creating asset inflation that has never been experienced before.  What happens when governments can't keep artificially creating wealth?  It isn't going to be pretty IMO.  

 

This administration is attempting to keep the economy humming while not upsetting its base that prefers cuts over new taxes.  Will it work - I doubt it but better than spend baby spend while cutting taxes ( BIG BEUATIFUL BILL 😞 )

Even if the headline is true, $7 billion a week for a month or two is a drop in the >$6,000 Billion annual budget.

 

A small price to pay for saving $1,500 Billion the Dems tried to add by extorting the country to keep the gub'ment chugging along.

 

6 minutes ago, impulse said:

Even if the headline is true, $7 billion a week for a month or two is a drop in the >$6,000 Billion annual budget.

 

A small price to pay for saving $1,500 Billion the Dems tried to add by extorting the country to keep the gub'ment chugging along.

 

If he gets some huge cuts, it would be well worth it.  Also, I seriously doubt it, if he is correct that the his beautiful bill increases growth and tax revenue, the USA will continue to prosper.  I bet he fails on both of the above but at least he is making an attempt to fix the debt mess.