Federal Shutdown Cost 2023: How Much Could It Hurt the Economy?
As Congress nears another budget standoff, the threat of a federal shutdown raises urgent questions: What’s the real economic toll? Beyond furloughed workers and closed parks, the ripple effects could be severe. PolitiFact’s fact-checking team analyzed past shutdowns and current risks—here’s what the numbers reveal.
The Immediate Cost: Billions Lost Weekly
Past shutdowns offer a stark warning. The 2018-2019 shutdown (35 days, the longest ever) cost the economy $11 billion, per the Congressional Budget Office (CBO). While $8 billion was later recovered, $3 billion vanished permanently.
In 2023, economists at S&P Global estimate a prolonged shutdown could drain $6 billion per week due to:
– Unpaid federal workers cutting spending
– Delayed government contracts
– Frozen critical services (e.g., food inspections, small business loans)
Federal Workers: Who Bears the Brunt?
800,000 employees could face furloughs or unpaid work. Though backpay is likely, the strain is immediate—40% of Americans can’t afford a $400 emergency (Federal Reserve). Essential staff like TSA agents and air traffic controllers must work without pay, risking delays (as seen in 2019’s airport chaos).
Broader Economic Damage
A shutdown could:
– Reduce Q4 GDP by 0.5% (Moody’s Analytics)
– Freeze $2B+ in small business loans (SBA 2019 data)
– Weaken consumer confidence amid inflation and high rates
Hidden Impacts: Services at Risk
- FDA: Fewer food inspections → contamination risks
- IRS: Delayed tax refunds → financial strain
- National Parks: Closures hurt local tourism
Could 2023’s Shutdown Be Worse?
Yes. With student loan repayments resuming and global instability (China, Ukraine), a shutdown could deepen economic fragility. The White House warns of investor panic and market volatility.
PolitiFact’s Conclusion: A Costly Crisis
The toll isn’t just political—it’s economic and far-reaching. Even a brief shutdown wastes billions and erodes trust. As deadlines loom, the stakes keep rising.
Bottom Line: A 2023 shutdown could be a multi-billion-dollar disaster with long-term scars.
—Fact-checked by PolitiFact | Follow for real-time updates
