Goldman Estimates 3 Week US Shutdown Cost to be 0.9% of GDP

On Monday, US President Barack Obama said that “a shutdown will have a very real economic impact on real people, right away”.

But what exactly will that economic impact be?

The last time the US government shut down in 1995, it cost the federal government $1.5bn (£927m) – that’s $2.1bn (£1.3bn) in today’s dollars.

Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.

However, markets, while down for the week – have not plummeted and, overall, are still up significantly for the year.

For now, it seems, the business community is focused on other concerns, like when the Federal Reserve will begin to ease off its extraordinary efforts to prop up the US economy – something the central bank says will not happen any time soon, partially due to Washington dysfunction.

via BBC

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