I am preparing a series of posts evaluating the cost of our budgetary dysfunction here in the US. “Cost,” as economists know, is a tricky word. Frédéric Bastiat famously explained that there are things that are seen, and those that are unseen.
As far as government shutdowns are concerned, the idea is certainly applicable. In my research, I came across this explainer in a CRS report on government shutdowns. It highlights why assessing cost is so tricky (and why it’s taking me so long to write these posts):
Even for those in the thick of things - knee-deep in the business of government -the true costs of shutdowns (and by extension, the true cost of government administration) are extremely difficult to quantify. There are the direct fiscal effects, but also effects that ripple across the economy. Further, there are longer-term ramifications that apply even to geostrategic considerations, which themselves feed back on the domestic economy and fisc. Keep this in mind as we go down the rabbit-hole.