Watch: Trump Chief Economist Says Shutdown Could Result in ZERO Growth if it Continues
Donald Trump‘s government shutdown grinds on and the bad news for economic growth keeps getting worse, as White House Council of Economic Advisers Chairman Kevin Hassett cheerfully acknowledged when he admitted that the shutdown could result in zero quarterly Gross Domestic Product (GDP) growth if it continues.
On Wednesday’s edition of CNN Newsroom With Poppy Harlow and Jim Sciutto, co-anchor Poppy Harlow pressed Hassett on the effects of the shutdown on GDP.
“Your outlook last week was 1.7% GDP for Q1,” Harlow said. “If this extends to March, we’re looking at 1% growth only for the first quarter. By your calculation, couldn’t we then see zero growth if this persists through the end of the quarter?”
Hassett tried to digress with a joke about putting Harlow’s viewers to sleep, but she kept him on task, saying “Let’s not do that. Could we get zero growth?”
Hassett tried to cushion the blow by saying that “it is true if we get a typically weak first quarter and have an extended shutdown, we could end up with a number that is low.”
“Would we get zero growth?” an undeterred Harlow pressed.
“But when the government reopens we get that back,” Hassett said.
For a fourth time, Harlow asked “Could we get zero growth? I want to nail this down.”
“We could, yes,” Hassett said, then claimed, “the second quarter would be humongous if the government reopens.”
Hassett’s estimates of the economic damage from the shutdown have been a lot like the old “Grandma’s on the roof” joke. On January 3, Hassett told reporters that the White House estimate was .10 percent for “every two weeks” of the shutdown, or .05 percent per week.
But two weeks later, Hassett claimed that the damage would be “a little bit worse” than he’d first estimated. By “a little bit worse,” he meant more than double. The new White House estimate was .13 percent per week of the shutdown, or .26 every two weeks.
Hassett explained that “We made an early estimate right at the beginning of the crisis that was a little bit lower than the estimate you just cited, and have been studying hard as this has gone on and have found that actually, the damage is a little bit worse because of government contractors, something that was excluded from our first analysis.”
And contrary to Hassett’s claim that the damage will be swiftly undone if the government reopens, S&P Global has said that once much of that growth is gone, it’s not coming back:
“While government workers will likely recoup their lost wages once the government opens, as they have in the past, the many government contract workers who are out of work because of the shutdown are unlikely to get back pay,” said S&P Global. “Workers who are living paycheck to paycheck will struggle to make ends meet the longer this goes on. As the standoff drags on, no paychecks are arriving to refill their savings, pay down credit card debt, make that mortgage payment, or pay their rent.”
And as Harlow herself pointed out elsewhere in the interview, government workers won’t “buy two sandwiches for lunch” once the government reopens.
Watch the clip above, via CNN.
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