The Greatest Risk to the U.S. Economy Is Still the People in Charge of It

http://www.theatlantic.com/business/archive/2013/10/the-greatest-risk-to-the-us-economy-is-still-the-people-in-charge-of-it/280640/



The 16-day shutdown of the federal government cost the U.S. economy billions of dollars in lost economic activity, from an idle district, to lost personal income and higher interest payments. But exactly how many billions did it cost?

Counter-factual accounting is guess-work by definition, but a few research firms have tried to attach a number to the shutdown. Macroeconomic Advisers put the figure at $12 billion. S&P estimate the cost was twice as high, at $24 billion. Split the difference, and you're talking about $18 billion in lost work.

What's a good way to think about that kind of money—a sliver of the entire $15 trillion U.S. economy, but still, you know, $18 billion? In July this year, NASA funding was approved at around $17 billion for the fiscal year. So, there: The shutdown took a NASA-sized bite out of the U.S. economy.

But that's just a nibble compared to the total cost of the budget showdowns stretching back to 2010. According to Macroeconomic Advisers, the total cost of Congress's assault on the economy going back to 2010—including the budget cuts, including sequestration, and fights around the budget cuts—was about 3 percent of our entire economy. That's $700 billion. That's not just NASA. It's one year's entire defense budget.