The Economic Consequences of the Government Shutdown

The shutdown's direct effect on the economy comes from the federal government's lost work-hours. The shutdown's indirect, and harder to quantify, effect on the economy comes from how much it scares households. It's particularly hard to quantify, because the shutdown fight is bleeding into the debt ceiling fight, so it isn't exactly clear what it is that's scaring households. So just like the debt ceiling crisis two years ago, the shutdown could dent consumer confidence enough to dent growth for months.

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