Government Shutdown Will Slow Economic Growth Significantly

Government Shutdown Will Slow Economic Growth Significantly (Bloomberg)

Moody’s estimates 3 percent economic growth for the United States.in the fourth quarter of 2013… That is, if there is no government shutdown in October. If the White House and Congress cannot come to an agreement on funding the country by Oct. 1, then a government shutdown of two weeks is predicted to cut that growth by .3 percent. A three-to-four-week closure would cut into growth by as much as 1.4 percent, as lost output would weaken gross domestic product.  However, the impact could be even worse, as those figures do not include the affect a shutdown would have on consumer or business psychology. Should consumers and businesses decide to withhold spending until the outcome of the shutdown is known, the decline in economic growth could be even worse. And that would certainly put a damper on holiday cheer.