Sign in Subscribe
Bessent, Scott

Federal Government Shutdown Costs US Economy $15 Billion Per Week in Lost Output

Strategic Insights

— 1 min read

The ongoing two-week-old federal government shutdown is taking a heavy toll on the US economy, with a Treasury official estimating that the shutdown may cost as much as $15 billion a week in lost output. This estimate came after Treasury Secretary Scott Bessent initially stated that the cost could be up to $15 billion per day. Bessent urged Democrats to "be heroes" and side with Republicans to end the shutdown, citing the negative impact on the economy. He also mentioned that the wave of investment into the US economy, including in artificial intelligence, is sustainable and only getting started, but the shutdown is increasingly an impediment.

Key Takeaways:

  • The federal government shutdown may cost the US economy as much as $15 billion per week in lost output, according to a Treasury official.
  • Treasury Secretary Scott Bessent initially stated that the cost could be up to $15 billion per day, but later corrected the estimate.
  • The shutdown is starting to "cut into muscle" of the US economy, according to Bessent.
  • The wave of investment into the US economy, including in artificial intelligence, is sustainable and only getting started, but the shutdown is an impediment.
  • Bessent expects the investment boom to continue due to incentives in the Republican tax law and Trump's tariffs.
  • The US deficit for the 2025 fiscal year ended September 30 was smaller than the $1.833 trillion deficit posted in the prior fiscal year, according to Bessent.
  • The deficit-to-GDP ratio could come down to the 3% range in coming years, according to Bessent.

Statistics:

  • The estimated cost of the federal government shutdown per week: $15 billion.
  • The initial estimate of the cost of the shutdown per day: up to $15 billion.
  • The US deficit for the 2024 fiscal year: $1.817 trillion (Congressional Budget Office).
  • The US deficit for the 2025 fiscal year: smaller than the $1.833 trillion deficit posted in the prior fiscal year.
  • The deficit-to-GDP ratio: currently above 5%, but expected to come down to the 3% range in coming years.

Sources:

  • Cyprus Mail 2022: Article citing Treasury Secretary Scott Bessent's comments on the government shutdown and the US economy.
  • CNBC 2022: Article citing Treasury Secretary Scott Bessent's comments on the investment boom and the government shutdown.
  • White House Council of Economic Advisers: Report providing the cost estimate for the government shutdown.
  • Congressional Budget Office 2022: Estimate of the US fiscal 2024 deficit: $1.817 trillion.

Read more