By: Dr. Lynn Reaser
Congressional members stared each other down Monday night and the lights essentially went out for the federal government beginning October 1. Even if the government shutdown is brief, will San Diego face any permanent damage.
The answer is “yes”. Although the last government shutdown in 1995-96 does not appear to have caused permanent damage, the current recovery appears to be much more fragile. The continued employment and pay of the over 100,000 Navy and Marine personnel based here is good news, but the furlough of significant numbers of the 46,000 civilian federal employees will hurt, particularly if they are not retroactively paid. Contract delays and the inability to conduct necessary government business will dampen productivity. The damage to business and consumer confidence represents the largest negative legacy, risking spending pullbacks every time budget gridlock seizes Washington in the future.
These are negatives for the economy that we should not be inflicting on ourselves.