April 6, 2011

What does a government shutdown mean for the everyman?

A government shutdown is looking like an increasing possibility and Mercatus Center scholar Bruce Yandle shares some of the costs we might see, drawing on his time as the executive director of the Federal Trade Commission during a government shutdown in the 80’s.  He says that when it comes to the cost of a shutdown, the $100 million number comes from a short shutdown experience, and as a shutdown continues, more activities will be affected.   

 “At the moment, we are entering the high period for processing income tax returns, payments, and refunds,” said Yandle.  “Lots of families are counting on getting those refund checks.”

Yandle explains that services that might be disrupted include the inspections of grain and other commodities headed to export markets and the inspection of imported food products.  And the longer the shutdown goes on, the more likely it is that we will see the effects hit the private sector.

“If national parks close or reduce operations, hotels, restaurants, hunting and fishing guides lose business,” said Yandle. “Each additional hour of shutdown brings another increment of interrupted services and activities, which in turn causes incremental costs to increase.”