Government, economics professors reflect on shutdown

Following the end of the federal government shutdown on Oct. 17, multiple professors noted that there would be short and long term ramifications on the political scene and in economic markets, though the extent of this impact is unclear.

Approval ratings for both Republican and Democratic Congressional members have declined in recent weeks, according to polls conducted by various news outlets. While the GOP has been hit especially hard, many government faculty believe it is too soon to tell how long the impact will last.

"There is some anecdotal evidence in the press that Republican donors, such as the Chamber of Commerce, are rethinking the campaign donations for 2014 and that Democrats have had success in a few districts in recruiting tough challengers," government professor Linda Fowler said in an email.

Although it is likely that events leading up to the shutdown will have an effect on the GOP's success in upcoming elections, such as the race for Virginia governor next month, this may fade by the 2014 midterm elections or the 2016 general elections. Government professor Brendan Nyhan said Americans have historically had a short memory, and by next year, it is possible that the public will have forgotten about this ordeal.

"One of the things that has happened is that people have gotten ahead of themselves and the notion that the Republicans are doomed in the next election cycle," Nyhan said. "If there is not another shutdown, this will probably not be a big issue."

During the end of former president Bill Clinton's second term, Republicans were very unpopular following a failed impeachment, Nyhan said. However, public opinion significantly shifted within two years, allowing Republican nominee George W. Bush to win the presidency in 2000.

Economics professor David Blanchflower said Republicans have paid a large price in the polls, and many have the perception that they were willing to bring the nation to a shutdown, raise uncertainty and play political games.

The shutdown made investors skittish and hurt consumer confidence. Blanchflower estimated that it is likely to have lowered the GDP by 0.5 percent.

"What is interesting [is that] economists, both Republican advisors and across the political spectrum, see this as economic madness," Blanchflower said.

The economy is also significantly globalized and other countries are looking closely at the economy for any ripple effects stemming from the resolved shutdown.

"The bottom line is what happens here matters to everybody," Nyhan said.

Blanchflower, who recently visited Spain, Ireland and the United Kingdom, said that the general reaction among the people he spoke to was one of disbelief and incredulity.

Nyhan believes that the group that has been most significantly affected by the shutdown are the federal workers. While these employees could not go to work, they may end up receiving backpay, government professor Joseph Bafumi said.

"Some economists have estimated that the lack of spending of those workers who did not have their paychecks during that period would have an impact on the economy, but I believe that the impact will be minimal in comparison to the impact of not having a compromised budget bargain and a solid fiscal budget plan in place," Bafumi said.

Other lasting political implications of the shutdown include delays of previously pressing issues.

"We could be thinking about all kinds of things such as immigration reform, but the shutdown has derailed that since it has been pushed off the agenda," Bafumi said.

In addition to immigration reform, the shutdown has also diverted attention away from the rollout of federal and state health exchanges on Oct. 1, said economics professor Ellen Meara, who also teaches at the Dartmouth Institute for Health Policy and Clinical Practice.

"In some ways, the shutdown has been helpful, because it bought time' for the Obama administration to begin fixing the troubled federal Marketplace exchange," Meara said in an email.

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