The Shutdown Did Irreversible Damage To D.C.'s Economy, Experts Say

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Breakfast links: The shutdown may have done long-term damage to the region’s economy
By Matt Gontarchick (Contributor) January 28, 2019

Will the government shutdown have a long-term effect on the region?
According to one local expert, the effects of the recently-ended shutdown will last years and have compromised the region's reputation as a stable job market. Another contends that perceptions around job stability won't change, citing the local economy's resilience during the Great Recession. (Ally Schweitzer / WAMU)

WAMU | JAN 25, 6:16 PM

The Shutdown Did Irreversible Damage To D.C.’s Economy, Experts Say
Ally Schweitzer

The longest government shutdown in history is expected to come to a halt Friday, with Congress on track to approve a short-term funding deal to reopen the federal government. But economists in the D.C. region say the furlough could leave a lasting imprint.

Stephen Fuller, a regional economist at George Mason University, says the impasse has tainted Washington’s reputation as a stable, attractive job market. ... “The image of this region has been tarnished,” says Fuller. “Workers will not want to work for the federal government as much now as they might have before. Federal contractors will have the same issue. … It’s going to haunt us for, perhaps, years.” ... There’s also a certain amount of irreversible economic damage that’s been done, Fuller says. Businesses that saw decreased sales during the furlough, such as restaurants and food trucks downtown, can’t expect to recover those losses.
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“Is this the last shutdown for this year? … At this point, no one can tell,” says Veronique de Rugy, a senior research fellow at the Mercatus Center. “If people think the shutdown is going to happen again in three weeks, that we’re not making progress, they’re not going to go back to [spending] their money the way they used to before the shutdown. … And that is going to delay the recovery.”

But unlike Fuller, de Rugy doesn’t predict lasting damage to Washington’s “brand” as an employment center. Working for the feds, she says, still has upsides. ... “Remember, during the Great Recession, this area fared way better than many other regions precisely because of our dependence on the federal government,” de Rugy says. “So it cuts both ways.”

This story originally appeared on WAMU.

[appalachiablue]

1. As intended, all along!

The image of this region has been tarnished,” says Fuller. “Workers will not want to work for the federal government as much now as they might have before. Federal contractors will have the same issue. … It’s going to haunt us for, perhaps, years.” ... There’s also a certain amount of irreversible economic damage that’s been done, Fuller says.