Editorial: The shutdown isn’t just hurting workers. The entire U.S. economy is faltering

Pedestrians walk through downtown Huntsville, Ala. on Jan. 8. More than half the area's economy is tied to Washington spending.
(David Goldman / Associated Press)

The longer the shutdown continues — it’s entering its fifth week, with no end in sight — the tougher it is for the roughly 800,000 unpaid federal workers and an estimated half a million unpaid federal contractors to make ends meet. Yet those of us who are still collecting wages in the private sector are being hurt too, and to a much greater extent than the Trump administration had previously acknowledged.

This week, Trump’s Council of Economic Advisers estimated that the partial government shutdown was slowing the U.S. economy by about one-eighth of 1% per week. That may not sound like much, but the debilitating effect is twice as great as the White House had previously suggested. Economists had projected growth to be anemic in the first quarter of 2019 even without a shutdown; if the impasse continues for another month or so, the economy could actually start to contract.

The credit rating agency Standard & Poor’s put the shutdown’s cost to the U.S. economy at about $1.2 billion per week. At that rate, by the end of next week the shutdown will have cost the economy more than Trump has demanded for the longer, taller wall he is so eager to build along the southern border — and for which he has kept much of the government shuttered.


That a prolonged shutdown could damage the economy should come as no surprise, considering that federal spending makes up 20% of the United States’ gross domestic product. Granted, much of that spending — including Social Security benefits, the military budget and Medicare — isn’t affected by the shutdown. But because of the sheer number of agencies, programs and contracts all across the country that have been cut off from the Treasury, the effects ripple far and wide as paychecks aren’t received or spent on food, clothing, entertainment, supplies and services.

Enter the Fray: First takes on the news of the minute »

The shutdown is just one of the headwinds blowing against the economy. The trade fights Trump has picked with much of the rest of the industrialized world are throwing sand in the global gears, contributing to a slowdown in such major foreign economies as China and Germany. Slower growth overseas typically means fewer U.S. exports and less growth at home. Meanwhile, the forces that had been boosting our economy — the new federal tax cut, high consumer confidence, a powerful bull market and exceptionally low interest rates — are petering out or, in the case of interest rates, reversing.

The president has taken obvious pride in the uptick in economic growth during his first two years in office. The shutdown threatens to end that growth. Trump should agree to end the shutdown and carry on his idiotic fight for a wasteful, ineffective wall project without inflicting so much collateral damage on the U.S. economy.

Follow the Opinion section on Twitter @latimesopinionand Facebook