Could a government shutdown damage the fragile economy? It depends on whom you ask.
Mark Zandi, chief economist for Moody's Analytics, told Congress last week that economic growth would slow during a shutdown. But Tad Dehaven, budget analyst for the CATO Institute, told CNN he believes that economy would be fine during a shutdown, primarily because of how the economy performed in 1995.
"The last time we had a government shutdown, the stock market was fine," he said. "The economy was fine."
Most economists agree, however, that the economic impact of a government shutdown depends greatly on how long the shutdown lasts. But according to some estimates, the a shutdown could cost the still-struggling U.S. economy roughly $1 billion a week just in pay lost by furloughed federal workers.
"If it's a relatively short shutdown, it's a minor headache," said Brian Kessler, economist with Moody's Analytics. "But if it lasts several weeks, the people affected start to act like they're unemployed. They delay larger purchases. That's why you start to see a significantly greater effect the longer it goes."
But the economic impact of an extended government shutdown will be more than just lost wages by federal workers.
-- With national parks and museums closed, tourism will be affected.
-- The Small Business Authority will be unable to process loan applications, meaning a dent in small-business growth.
-- Federal contractors would also have to cut back on staffing.