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White House claim: shutdown cost billions, lowered gdp growth.

The partial government shutdown in October will end up costing taxpayers more than $2 billion and a quarter percent or more in GDP growth for the U.S. economy this year, claimed a report from the Office of Management and Budget (OMB) released by the Obama White House November 7.

"During the 16-day shutdown," the OMB reported, "Federal government employees were furloughed for a combined total of 6.6 million days," amounting to 6.6 million days of paid vacation for federal employees. "We estimate that the total cost of pay for furloughed Federal employees during the period of the shutdown is roughly $2.0 billion. Total compensation costs, including benefits, are about 30 percent larger, in the range of $2.5 billion."

While the direct cost to the taxpayers is more or less straightforward--much of the work not completed by government workers will be done later by employees paid overtime wages, or by temporary workers--the White House's OMB next engaged in the far more speculative claim that the shutdown hurt the larger U.S. economy. "Outside experts estimate that the shutdown will reduce fourth quarter Gross Domestic Product (GDP) growth by 0.2-0.6 percentage points."

Most of the claims of "negative economic impact" of the shutdown are based upon defective economic analysis, as the OMB calculations have no way to account for what would have been done with the money used from the subsidies had the funds been left in the free market.

But the real political motivation behind the OMB study was to help demonize the Mama administration's political opposition. For example, the Washington, D.C.-based newspaper The Hill reported November 10 that financial kingpins have targeted House Liberty Caucus Chairman Justin Amash in a primary. The Hill story carried the headline, "Donors plot against GOP rebel," and explained: "Business leaders are plotting to take down Rep. Justin Amash (R-Mich.) as part of a broader effort to punish lawmakers over the government shutdown."

Look for Obama.'s OMB report to be used as a bludgeon in both GOP primaries and in the 2014 general elections against Tea Party-aligned Republicans such as Amash.

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Title Annotation:INSIDE TRACK
Publication:The New American
Geographic Code:1USA
Date:Dec 2, 2013
Words:356
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