Coming to a Town Near You: Economic Blowback from the Shutdown

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It's day two of the government shutdown, and there's no end in sight (although enough House Republicans have publicly defected that if Speaker Boehner allowed a clean bill to be voted on, we now know it would pass). Parks are still closed, museums are still shuttered, the NIH is still not enrolling new patients in its cancer studies, and NASA is still off line. And, in a city near you, the economic troubles are just beginning.

Not surprisingly, the media's focus has largely been on Washington, D.C. After all, in addition to being the seat of the federal government, that's where the Panda Cam used to transmit cuteness worldwide, where a couple of Republican congressmen helped World War II vets to break into the national WWII memorial, and where staffers of the White House and Congress -- the people who really keep the government running -- are officially off the clock.

But Washington isn't the only place that's feeling the effects of the shutdown -- in fact, by some measures, it's not even feeling them the most. The Washington Post's business section recently compiled a map of the top metropolitan areas when it comes to federal employees. While D.C. had the largest number -- 446,000 -- it actually ran a surprising fourth when it came to percentage of workers who were employed by the federal government.

Colorado Springs, Colo., topped the list: Although it has a comparatively meager 55,000 federal employees, they represent 18.8 percent of its workforce. About 17.2 percent of Virginia Beach's workers draw a government paycheck, as do 17.2 percent of Honolulu's. By comparison, D.C.'s 14.3 percent federal employment seems almost unremarkable.

In some ways, this may sound like hair-splitting. After all, there is little question that the budget showdown is having a brutal impact on the nation's capital: According to one estimate, the current crisis is costing the metropolitan area $200 million every day. Still, it's worth noting that the economic effects of the furlough will be widely shared: According to a JPMorgan estimate, the shutdown is reducing nationwide income by $1.3 billion per week. Add in the multiplier effect of all that lost income, and it's clear that nobody is getting out of this crisis unscathed.*

That having been said, however, it's worth noting that the government is a major employer around the country. And, while military personnel and other "essential" employees are going to stay on the clock, all those "non-essential" workers who push papers and film pandas aren't going to be drawing paychecks. Which means, fairly soon, they'll stop spending those paychecks at the local McDonald's or Bed Bath and Beyond. For that matter, all the people who were counting on getting their veterans benefits started this month will likewise, not have money to spend. With the ripples of this shutdown just starting to spread, it's worth asking just how many degrees of separation there are between a federal employee's spending and your paycheck.

*Except, perhaps, for political analysts, who seem to be having a field day. For a few highlights of the shutdown parade, check out the Washington Post, where Steve Pearlstein is one of many analysts offering a little Monday-morning quarterbacking in his suggestion of how Democrats could fix the whole problem. Or, if you prefer, you could check out FoxNews, which is trying to rebrand the shutdown as a "slimdown." Or, alternately, there's Salon, which is trying to crowdsource a prediction on how long the shutdown will last. The current average prediction is 18 days, and the median is 14 days.



Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


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16 Comments

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hugh_geenormous

Look everyone...braindead adele learned how to copy and paste.

October 03 2013 at 11:33 PM Report abuse rate up rate down Reply
Adele

I\'m tired of the games being played in DC. What\'s happening is a power play by the members of congress that are angry because they don\'t have control of the house and the presidency. The far right obstructionists are no better than the left liberals. The republicans stated their only plan was to destroy President Obama. WHY?

They have refused to pass any legislation that would have created jobs therefore bring in more taxes, reduce the cost of unemployment insurance and the cost of food stamps, (which they are trying to take away from millions of Americans, many of those are children). Now the all Americans are being held hostage by uncompromising zealots. Give us the \'good ol days of Tip O\'Neal and Ron Reagan\'. The tea party is trying to hijack the government with they\'re extreme ideology. The only thing they are doing is hurting all American citizens.

Now they want to take away the chance for low income families to have affordable health care. How will defunding Affordable Care bring down health care costs when uninsured wait to go to a doctor until they are so ill they go to an expensive ER which they can\'t pay for therefore hospitals have absorb those costs so the cost for care increases which means insurance premiums must rise and so forth and eventually the taxpayers get stuck with the cost. With or without affordable care taxpayers are stuck paying the bill.

It\'s a proven fact that preventive care reduces costs. Also, who pays for the uninsured in horrendous accidents or catastrophic illnesses. AH HA! Guess who?? The working taxpayer!! How is that a better way? Answer me that!!

Too many uninformed and silly posters on this site who have no idea what they are talking about. Just the usual spin from nutcakes who should know better.

October 03 2013 at 10:31 PM Report abuse rate up rate down Reply
1 reply to Adele's comment
hugh_geenormous

Ronald Reagan negotiated with tip oneill, simp. And low income families won't have affordable care, they will have subsidised care....paid for by ...guess who?

You're.just another hack. STFU.

October 03 2013 at 11:14 PM Report abuse +1 rate up rate down Reply
1 reply to hugh_geenormous's comment
betty_brock

Libs just don't get it.

October 04 2013 at 3:10 PM Report abuse rate up rate down
Adele

Republicans -
Phony Christians
http://authorbob.blogspot.com/
Many self professed Christians despise socialism, many of whom, hypocrites that they are ,benefit from social programs like social security, medicare, medicaid and food stamps. Either ignorant of or intentionally ignoring the Bible, they regard not that shortly after the crucifixion the apostles carried on in the manner that the Lord had taught them. And with great power gave the apostles witness of the resurrection of the Lord Jesus: and great grace was upon them all. Neither was there any among them that lacked: for as many as were possessors of lands or houses sold them, and brought the prices of the things that were sold, and laid them down at the apostles’ feet: and distribution was made unto every man according as he had need. Acts 4:33-35. Ladies and gentlemen, that is a socialist collective, and such is the kingdom of heaven. Speaking of socialism, phony Christians also revile liberals. A Christian cannot despise a liberal—a Christian is liberal. Here is a selection of words: not bound by authoritarian, orthodoxy, or traditional forms. Free from bigotry. Tending to give freely…marked by generosity. Those words describe Jesus Christ. They are dictionary definitions of the word liberal. You can’t love Christ and hate liberals; that is a house divided, which can only fall. Phony Christians dislike our neighbors and oppose immigration. That is not what Jesus would have, nor what the Bible teaches.And if a stranger sojourn with thee in your land, ye shall not vex him. But the stranger that dwelleth with you shall be unto you as one born among you, and thou shalt love him as thyself; for ye were strangers in the land of Egypt: I am the LORD your God. Leviticus 19:33-34 Phony Christians love to say ‘God Bless America,’ and become indignant when our leaders and others overlook to speak those words; words which Jesus would never utter. I pray for them: I pray not for the world, but for them which thou hast given me; for they are thine. John 17:9. Jesus warned that whited sepulchers and wolves in sheepskin would come, and so are they among us now, claiming to speak of the Lord when in truth they chatter like devils.

October 03 2013 at 10:11 PM Report abuse -2 rate up rate down Reply
2 replies to Adele's comment
hugh_geenormous

Oh screw off....thstnis nit socialism that is not welfare that is nit collectivism
........that is charity. Where in this story did an overpowering, overbloated central government confiscate the fruits of the people's labor to launder the stolen money through a bunch of fat bureaucrats and then sprinkle it out over people of their choosing for political favor?

No.....it's very simple. Jesus said sell all you belongings and follow him. He said we cannot idolize money over God.


Man....It's truly pathetic when you phoney secular libs start trying to talk drag the Son of God into all of this manmade bullshlt. Get over yourself adele.

October 03 2013 at 11:25 PM Report abuse +1 rate up rate down Reply
hugh_geenormous

You are such an imbecile.....giving freely is not being raped by taxation.

October 03 2013 at 11:30 PM Report abuse +1 rate up rate down Reply
Adele

http://maddowblog.msnbc.com/_news/2013/10/03/20803776-neugebauer-plays-tough-bullies-pa

Insane Republicans running amok. Bauchman and Gohmert and Culberson dancing on the Capitol steps and screaming \"WE SHUT THE GOVERNMENT DOWN\" and then this idiot is blaming the Park Ranger at the Memorial Wall for closing the place down. Well, nobody ever said these nutcakes had any class.

October 03 2013 at 10:10 PM Report abuse -1 rate up rate down Reply
1 reply to Adele's comment
hugh_geenormous

What's even more idiotic is to say we don't have the money to keep the national mall open, but se have the money to put up barricades......dolt.

October 03 2013 at 11:27 PM Report abuse rate up rate down Reply
setanta54s_back

CANNOT WAIT for the economic BLOW BACK to the feral gubmint
when
the fabled
\\SHTF sceanriO finally arrives.

October 02 2013 at 11:45 PM Report abuse rate up rate down Reply
Schlittenburg07

All I can say is that if our economy is totally dependent on Big Government, we are in real trouble. Perhaps the problem is that our educators don\'t teach people where money comes from. It either has to be confiscated from working folks (taxes) or printed in reams at the Federal Reserve (which de-values it and causes inflation). Either way the supply is far from limitless.

What happens when it runs-out? Look no further than Greece or the former Soviet Union. As for the Republicans and Democrats, I don\'t see any real difference. They\'ve both broken nearly every promise they campaigned on, giving us War, Deficit Spending, Worthless Money and a gutted Constitution and Bill Of Rights. Remember, BOTH sides voted to bail-out Wall Street.

Republicans vs Democrats? Don\'t make me laugh.

October 02 2013 at 11:00 PM Report abuse rate up rate down Reply
1 reply to Schlittenburg07's comment
setanta54s_back

what\'s stopping you and anyone ELSE out here from getting a MOVE on and investigating candidates for 2014 that are constitutional conservatives and spreading the info within your district ?
they\'re out there.

and NEVER STOP RANTING ON HOW GREAT THAT HOPE AND CHANGE SHEISS WORKED.

October 02 2013 at 11:48 PM Report abuse rate up rate down Reply
betty_brock

Evan thinks everyone on Social Security is the same as a welfare bum, like him. What a disgrace.

October 02 2013 at 10:25 PM Report abuse +1 rate up rate down Reply
betty_brock

Kind Obama says lets compromise. What he means is do as I say or off with your head.

October 02 2013 at 7:56 PM Report abuse +1 rate up rate down Reply
1 reply to betty_brock's comment
setanta54s_back

no he said i will not negotiate
and IT\'S ALL DUE TO THEIR BS OBUMMA CARE.
===============
Obama and Senate Democrats have rejected the House-passed proposals because they all make major changes to Obama\'s health care law.

search the quote

October 02 2013 at 11:57 PM Report abuse +1 rate up rate down Reply
joejoegolfn

This whole thing is nothing but democrat thug politics and means nothing at all. Real people are losing their jobs and hours over the democrats wrecking this economy. The Fed workers got paid on Sept 30 and will get paid in 2 weeks just as they normally do unless the shut down last more than two weeks. All 17 shutdowns have given backpay to all federal employess so this is nothing but media democrat BS

October 02 2013 at 5:44 PM Report abuse -1 rate up rate down Reply
hugh_geenormous

Yawn.....

October 02 2013 at 4:29 PM Report abuse rate up rate down Reply