The federal government is currently in the third week of a shutdown sparked by a dispute over funding for a southern border wall. Now, a new analysis from S&P Global Ratings found that the costs of the government shutdown versus the wall are starting to look quite similar. For some, this finding is pretty striking, to say the least.
S&P Global Ratings' Jan. 14 analysis found that by Jan. 11, 2019, the 21st day of the federal government shutdown, the United States economy had lost $3.6 billion during the closure. As the analysis described, this means that the American economy lost around $1.2 billion during every week of the shutdown, which commenced on Dec. 22, 2018.
S&P further indicated that these numbers point to a striking notion — that, in two more weeks, the economic cost of the shutdown will surpass the amount President Trump wants to build his border wall. The president's $5.7 billion request for the border wall's construction has been a sticking point in government funding discussions.
As CNBC reported, S&P's researchers arrived at their economic loss figures by analyzing shutdown-related costs. These costs included diminished productivity from federal workers and reduced sales for government contractors, among others.
S&P also reflected on the implications of this economic loss. Beth Ann Bovino, S&P’s chief U.S. economist, said in a note on Jan. 11 (via CNBC) that the loss is currently being most profoundly felt by individual federal workers. " [The shutdown-induced economic loss] may seem like pennies for the world’s biggest economy, but it means a lot to those workers trying to cover their household costs without their paychecks,” Bovino commented. In its analysis, S&P also warned the United States' overall economic situation could look bleaker the longer the shutdown continues. "The longer this shutdown drags on, the more collateral damage the economy will suffer," the analysis noted.
Vox reported that, on Thursday, Federal Reserve Chair Jerome Powell similarly reflected on the potential long-term economic implications of the shutdown. Vox noted that Powell stressed during a speech at the Economic Club of Washington that, right now, significant "personal hardship" constitutes the primary economic consequence of the shutdown. But, considering there's a chance that the shutdown will last for a very extensive and unprecedented length of time, broader economic impacts may also eventually be felt as well. “A longer shutdown is something we haven’t had,” Powell said in his Economic Club address (via Vox). “If we have an extended shutdown, I do think that would show up in the [economic] data pretty clear.”
The 800,000 federal workers who are either furloughed or working without pay are certainly feeling the impacts of the shutdown after their first paychecks were not distributed last week, Vox noted. The outlet indicated that, collectively, this means federal workers missed out on $2 billion in pay, which they will only recoup in back pay once the government reopens.
Overall, as the shutdown drags on, the costs for the country's federal workers — and perhaps eventually for the country's overall economic health — are continuing to mount. Many are likely certainly hoping that the shutdown will come to an end before the cost of the government's closure exceeds the cost of the wall in two weeks' time.