Containers of goods idling at ports. Reduced sales at sandwich shops in downtown Washington. Canceled vacations to the capital and to destinations abroad. Slashed corporate earnings forecasts. Higher interest payments on short-term debt.
Even with the shutdown of the U.S. government and the threat of a default coming to an end, the cost of Congress's gridlock has run well into the billions, economists estimate. And the total will continue to grow even after the shutdown ends, partly because of uncertainty about whether lawmakers might reach another deadlock early next year.
A complete accounting will take months once the government reopens and the Treasury resumes adding to the country's debt.
But economists said the squabble would take a bite out of fourth-quarter growth, which will affect employment, business earnings and borrowing costs. The ripple from Washington will be felt around the globe.
"We saw huge effects during the summer of 2011, with consumer confidence hitting a 31-year low in August and third-quarter GDP growing just 1.4 percent," said Beth Ann Bovino, the chief U.S. economist at Standard & Poor's, referring to earlier brinkmanship over the debt ceiling.
"Given that this round of debt-ceiling negotiations" took place during a shutdown, she said, "the impact on the economy could be even more severe."
The shutdown has trimmed about three-tenths of a percentage point from fourth-quarter growth, or about $12 billion, the forecasting firm Macroeconomic Advisers, based in St. Louis, recently estimated.
The 16-day shutdown itself has led to the biggest plunge in consumer confidence since the collapse of Lehman Brothers in 2008. Howard Levine, chief executive of Family Dollar Stores, said his customers, most with modest incomes, had pulled back on spending this month.
"The threat of the shutdown, the uncertainty regarding some of the government assistance that our consumers receive, the uncertainty around job growth, are very real to our customer every day," Levine said.
"Even with a deal to avoid a default, the damage has been done by the fact that we have had a debate questioning whether the U.S. will pay back its debt," Laurence D. Fink, chief executive of the money manager BlackRock, said Wednesday.
While this fiscal impasse may be ending, many on Wall Street fear that Washington is not done.
"Then we can come back some time in December, January and February," said Brian Gardner of Keefe, Bruyette & Woods, a New York investment bank, "and do this all over again."
(c) 2013 ProQuest Information and Learning Company; All Rights Reserved.
Original headline: So where was the harm in the quarreling? Everywhere.
Most Popular Stories
- Doctor Who Christmas Episode Begins Production
- HCL America Adding 1,200 IT Jobs
- Medical Mfg. Jobs Coming to Dayton
- Michael Jackson, Freddie Mercury on Previously Unreleased Queen Cut
- Longtime Unemployed to Get Help in Las Vegas
- SpaceX Aims for Predawn Launch on Saturday
- Women Key to Democratic Party: Clinton
- U.S. Chamber Caught Up in Tax Inversion Question
- Feds Won't Say How Many Border Crossers Jailed
- Christie Didn't Order Bridge Shut Down, Feds Say