According to new analysis by personal finance website The Ascent, the U.S. economy could lose up to $13 billion every month — or $430 million each day — that the government is shut down.
The research, conducted by the data analyst team at The Ascent, shows the projected monthly loss of income from withheld federal salaries, as well as the loss of income substitution from the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP). Data is analyzed on a state-by-state basis and includes potential per capita losses as well as potential total monthly losses.
The full analysis, including the methodology and a chart of the estimated economic loss broken down by state, is available at www.fool.com/the-ascent/banks/blog/us-economy-could-lose-up-to-13-billion-a-month-due-to-government-shutdown/.
While states with large populations, such as California, Florida and Texas, predictably saw some of the largest total dents to their economy, areas hit the hardest on a per capita basis were those with a high percentage of government workers, subsidies or both.
Washington D.C. saw the largest per capita loss, with a potential of $835 million in lost revenue – followed by its neighbors Maryland, at $770 million, and Virginia, with $887 million. The nation’s capital, Maryland and Virginia also lead the nation in federal workers as a percent of the workforce, with 17.5%, 10.1% and 8.1% respectively – compared to a national average of 2.4%. To put Washington D.C.’s struggles into further perspective, it ranks 49th out of 51 in population, yet is 5th in potential economic activity lost.
Interestingly, despite ranking 43rd and 48th lowest in federal employees as a percentage of the workforce, Illinois and Michigan saw some of the largest potential losses due to high usage of SNAP benefits.
About The Ascent
The Ascent is focused on bringing financial expertise, trusted advice and unbiased analysis to daily personal finance decisions. With the number one goal of helping people find the best offers and products to improve their finances, The Ascent relies heavily on first-person stories and reviews to ensure readers get an honest take from someone with personal experience. The Ascent is a Motley Fool brand. For more information, visit fool.com/the-ascent.
SOURCE The Ascent