So, What Really Happens During Government Shutdowns (Pt 2)

The term government shutdown, as you're doubtlessly aware, is inaccurate in the first place. 

The federal government doesn't actually shutdown. It prioritizes. 

During a partial federal government shutdown, there's actually a great deal of discretion with regard to what stays open and what doesn't. But what's its impact to you?

Picking up on a few key points from my first story... During the typical government shutdown only about 86 of the 430 federal agencies aren't operating. The reason why most people never see, touch or feel the impact of partial government shutdowns is because they aren't working or on the receiving end of some type of arrangement with those agencies. 

One of the most visible which was impacted during the last partial shutdown in 2013 were the park'service. That's happened to a certain extent again this time with access to the Statue of Liberty temporarily down this weekend (most landmarks and parks remain open). In Everglades National Park, for example, most of the park remains accessible but with buildings and stores that are generally manned not being open (for actual info on what's open and closed in the Everglades here's the link: https://www.nps.gov/ever/shutdown.htm ). Otherwise the impact isn't likely felt by you. Now about economics... 

You hear that the economy is hurt by these shutdowns. So, what's real? Here are the facts... 

  • Our average federal spending is about $11 billion per day 

  • With about 20% of the federal government not operating there's potential savings of $2.2 billion per day 

In other words if we operated under these conditions for a full year we'd save around $803 billion in a year. However, that's not always the case due to back pay for furloughed federal workers having been part of some prior budget deals. But what about the economy? 

Last year the federal government was 20.7% of the US economy. That means that under a partial government shutdown 4.1% of the US economy is impacted or in other words 95.9%, of the US economy isn't impacted. And that's before we get into economic arguments. Obviously, the federal government doesn't have anything unless it takes it from us. So, while you'll hear the woe is (insert victim here stories) but what's better for our economy and us over the long term...Lower debt and lower taxes or higher debt and higher taxes? 

In other words despite short term, minor, economic blips related to shutdowns - there's a solid economic argument to be made that we're better off with them in place to restrain government spending... 


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