$24 Billion Lost to the Economy? Yeah not so much. | Eastern North Carolina Now

    Standard & Poor's, the credit rating agency, has declared (a week and a half ago) that the government shut-down took an estimated $24 billion out of the US economy.

    This number keeps coming up again and again by those parroting blame for the shut down on particular suspects. So despite the fact that this is now old news, I felt compelled to address this particular political myth.



The S&P's estimates included the following calculations:

• About $3.1 billion in lost government services, according to the research firm IHS
• $152 million per day in lost travel spending, according to the U.S. Travel Association
• $76 million per day lost because of National Parks being shut down, according to the National Park Service
• $217 million per day in lost federal and contractor wages in the Washington D.C. metropolitan area alone

    Thus the ripple effect of that money lost to the economy... at least so says a company who, when sued by the Department of Justice for fraud in February of this year, claimed that they had never made a legally binding promise to produce objective and independent credit ratings.

    Where S&P went wrong starts with the fact that all that lost revenue from travel and national park visits didn't actually disappear, it was just merely spent other places besides in those industries. The federal worker's pay was back paid, so all the ripples from the spending of their pay was merely delayed as opposed to removed. And while government contractors will not get compensation for being furloughed, the work they didn't complete will result in further employment.

    Ultimately though, the biggest savings is going to be in money NOT taken out of the economy during the shut down. The astute observer would note that taxes continued to be pilfered from the citizenry, so where was the money not taken out of economy?

    It was from the staving off of the inflation that was about to be created by the increased printing by the Federal Reserve. The Fed then loans (gives) that newly created money to their favored banks who in turn purchase those Treasury bills. So not only does the economy lose the value of the money the American people did have, but now to add insult to injury, We The People now have to pay interest on the money that belonged to us in the first place.

    The very idea that this shut down "cost us" anything is absolutely absurd. While it may have caused some individuals some pain, regrettably, it actually saved the whole economy the heartache of that additional interest and devalued currency from the money creation that would purchase the new T-bills. Which means that more money would have been in the hands of producers actually improving the standard of living. Re-opening the 17% of the government that was shut down is costing us, not the other way around.