Lowdown on the shutdown: The economy will be fine
could be called the special 鈥淧onder the Shutdown鈥� edition鈥損erhaps the first in a week- or month-long series. For federal workers, most of whom live here in the DC area, these are no doubt scary times, when one is not sure if one will be deemed 鈥渆ssential鈥� and continue to get paid. (Here鈥檚 from today鈥檚 Post.) I feel badly for my government-worker friends but continue to believe the adverse effects of a shutdown would be largely contained within the Beltway and that over the longer run or even immediately, simply because I doubt it would last very long or affect the neediest of households. (Safety-net benefits will still get paid, and although government workers really aren鈥檛 paid as highly as their private-sector counterparts, I think they still do well enough to survive any potential blip in their income stream.)
The threat of the shutdown is hardly about the federal dollars it would save from the shutdown, or even about the continued funding for the current fiscal year (through September) that the disagreement is supposed to be about. The threat of a shutdown amounts to a 鈥渟hakedown鈥� that each side is using to try to claim intellectual dominance or moral superiority over the other side on the federal budget more generally. And the amounts of attention currently given to the particular unresolved budget issues鈥揳bout this week, this year, next year, and beyond鈥搒eem inversely proportional to the sizes of the problems.
Incidentally, speaking of both 鈥渋ntellectual dominance鈥� and 鈥渕oral superiority,鈥� it appears that Paul Ryan made a to do the macroeconomic analysis of his budget plan. (And I would believe that even if Paul Krugman wasn鈥檛 the one, , to point it out.)
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