How much has the shutdown cost? There's an app for that. | Hacker News Reader

How much has the shutdown cost? There's an app for that.

shutdown.outline.com

21 pointsoutline18 comments

"That estimate, from economic consulting firm IHS Global Insight, covers just the cost in work and services the government is unable to perform as it furloughs 800,000 federal workers. According to IHS, pay for federal employees is considered part of the Gross Domestic Product, which is the total value of all goods and services produced in the nation each year."

ADD:

1. Lost business from unavailable infrastructure, e.g. BEA numbers being unavailable.

2. Long-run increased cost of doing business from the political volatility this sets a precedent for. This also includes any risk-premium that may be built into future Treasury prices (unlikely to be anything but zero, barring a default).

SUBTRACT:

1. Recoverable damage, e.g. if you can't get a passport this week for a vacation in a month you can get it in 2 weeks without compromising any plans.

2. Saved government spending. This reduces the deficit. This reduces expected future (a) inflation, (b) taxation, or (c) default risk.

So IHS is just counting the money saved by not paying non-essential employees as a "cost"? That's pretty bogus.

The source seems to refer to a reduction in gov payrolls/spending as a reduction in GDP as a cost. That seems like a stretch.

The only costs I would consider are costs directly related to having folks stay home and lost revenue related to closures.

If you click through to the eventual source, the cost is the predicted amount that will not be added to GDP. I am not sure that really qualifies at a cost.

Something that you would otherwise get that you don't get because of a particular action is a cost of that action. I don't think that's particularly controversial view.

But is a reduction in GDP really a "cost"? To who?

> But is a reduction in GDP really a "cost"?

Yes.

> To who?

It's creation of value that would otherwise happen that is not happening; its a net cost to the nation as a whole. Which particular firms and individuals are paying it is, perhaps, harder to determine.

But the money will get spent eventually. And didn't it reside in consumer hands before it became tax coffers?

I still have a tough time with reduced government spending being considered a cost.

To businesses, individuals and eventually governments at every level in lost tax revenue. By not spending the government is effectively removing money from the system. Over the medium term a reduction in GDP may cost even more as the Federal Reserve may feel the need to provide stimulus to counteract the effect, increasing its liabilities and interest costs.

Don't worry, we can make it up by breaking all our windows.

What do you expect when increasing next year's budget over this year's by five percent instead of ten percent counts as a five percent cut..?

It's ironic the shutdown is because of there being no money to spend and the shutdown is costing money which makes sense. But according to this calculator which references an NBC Business News link as costing $12.5 million per hour the current cost is approaching 600 million, crazy.

> It's ironic the shutdown is because of there being no money to spend

The shutdown is not because there is no money to spend. The shutdown is because there is no authority to continue to spend money. The two are not the same thing.

Can you explain how they are different as it relates to get OP calling it ironic?

It might be ironic either way (irony is inherently subjective), but as irony is based on contrast between reality and expectations and expectations of the results of an "action taken because I don't have any money" and those of an "action taken because, independent of how much money I have, I am legally prohibited to spend it except for certain narrowly-prescribed purposes, none of which is 'efficiency'" are different in ways which, at least arguably, are relevant to whether or not "this action results, in net, in greater costs for less benefits" conflicts with them.

$3473.80/sec, if that means anything... :D

The shutdown has saved us billions and continues to bear fruit.

The shutdown temporarily costs money since the leeches working for the government which itself produces NOTHING aren't leeching at the moment. Money isn't getting printed or borrowed to artificially boost the economy and the current house of cards set up by all the huge debt accumululation.

Theoretically they should get real jobs in the private sector producing real wealth. Unfortunately there needs to be some serious economic correction to get rid of all the crap currently in the system before things would start to really improve. But cutting the government down to size is absolutely essential for this to even begin to happen.

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