Government. Shutdown?



The federal government recovered from a roughly two-and-a-half week shutdown that left millions without jobs and sent ripples throughout the fabric of the economy. It is no secret to many what some of the consequences are of a federal government shutdown: national parks, national monuments, and rest stops are all closed, and myriad government services are unavailable.

Some of the effects are less apparent to the general public. A paper recently written by the Council of Economic Advisers details some of these effects. For instance, because national parks and monuments were closed, this reduced travel by tourists, which also affected hotels, restaurants, and businesses across the board. The CEA estimates the total damage to the economy to be in the .2%-.6% of GDP growth range for the fourth quarter. Approximately 120,000 jobs were lost as a result of the shutdown.

This large hit came on the economy because of a sixteen-day shutdown. Sixteen days cost tens of thousands of jobs and dramatically slowed GDP growth. If there has ever been a better flashpoint example of the monstrous size of the federal government, let me know. Of course, there are things the federal government needs to do, and a shutdown should be expected to harm the economy in some way, but not in such a gigantic way in such a small period of time.

The seriousness of a federal government shutdown would be dampened were the occurrences or near-occurrences of shutdowns less frequent and for more isolated reasons. It seems, however, that shutdowns may become the new norm. Rather than view a government shutdown as a crisis that needs to be averted, it has become a political battleground with bigger chances of success in political pushes albeit with significantly higher stakes. A government shutdown should be viewed as ultimate failure, not something to be used as means of avoiding ultimate failure.

The state of Minnesota has had even more experience with government shutdowns as the state government was closed for 20 days in July of 2011 and 10 days in July of 2005. There are no small consequences for a government shutdown. Each one has had significant negative effects on the economy and, obviously, the administration of the government.

Has the government become too large? The government employs approximately 21,925,000 workers. That’s nearly 7% of the total population. The number of government employees has grown roughly proportional to the population, but the absolute size and influence has steadily grown, as evidenced by the larger sway government shutdowns have had on the economy. The government needs to exist and it surely performs necessary functions. When has the government outdone itself?