Does a Government Shutdown Save Us Money?

The notion that a government shutdown could save significant amounts of money is frequently challenged. A quick search on Google reveals numerous articles and infographics highlighting the financial impact of such measures. For instance, the headline, "The Government Shutdown Cost the U.S. Economy 11 Billion," underscores the substantial costs associated with a shutdown. Let's delve deeper into why a government shutdown, in fact, does not save money and can even prove to be economically detrimental.

Government Services and Economic Wealth

Government services contribute to the wealth of a nation in various ways. These services range from infrastructure development and maintenance to regulatory oversight, education, and public health initiatives. During a government shutdown, only essential services are maintained at bare-bones levels, while the majority of the workforce is left idle. This idle workforce not only loses income but also contributes to an artificial recession.

The Real Costs of a Government Shutdown

A government shutdown is not a cost-saving measure but rather an expensive one. Here’s why:

Deferred Maintenance: When regular maintenance and repairs are deferred due to a shutdown, the costs can significantly increase in the long run. For instance, neglecting regular maintenance on roads and bridges can lead to more extensive and costly repairs in the future. Retroactive Pay: Government workers do not receive back pay during a shutdown, instead, they receive it retroactively once the shutdown ends. This does not eliminate the initial cost; it merely shifts the timing of the payment. Overtime Pay: Furloughed hourly workers are often paid overtime to catch up on backlogs, which adds to their regular salaries. This process of backfilling work can be extremely costly for the government and the economy. Unpaid Essential Workers: Unpaid essential workers accrue interest on late wages, further increasing the financial burden. Worker Retention and Replacement: A significant cost is the backlog of work that builds up during a shutdown. To address this backlog, the government must hire additional employees, which incurs costs. Additionally, laying off experienced workers and having to retrain new ones can cost from 1 to 6 months of their salary. Knock-on Effects on the Private Sector: Government shutdowns can lead to downtime in private sector operations as well. For example, security screening lines at airports may become longer due to TSA screeners calling in sick. This can affect travel plans and diminish the overall economic activity.

Conclusion

A government shutdown is not a cost-saving measure but rather a costly one with significant economic ramifications. It results in idle workers, backlogs, increased maintenance costs, and overall economic inefficiencies. The financial impact of such measures ultimately outweighs any small savings that might be derived from temporarily furloughing government employees.