As the U.S. government heads into another shutdown, prominent economists are weighing in with their takes, offering fresh warnings while expressing their frustrations.
A ‘Pointless Spectacle’
Economist Justin Wolfers of the University of Michigan dismissed the economic impact, calling the shutdown “just not that big of a macroeconomic event,” but criticized it as “a costly charade, an infuriating waste, and a pointless spectacle,” on Tuesday, in a post on X.
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Wolfers added that the entire charade has become routine for the federal government, with several instances of shutdowns in recent decades, but said that it “eventually will pass,” in a video snippet accompanying his post, featuring his recent appearance on CNN.
He noted that public servants who often stay home during shutdowns and are later paid retroactively, and as a result, he finds all of this “awfully pointless.”
Could This Time Be Different?
Economist and former CEO of PIMCO, Mohamed El-Erian said that past shutdowns “tended to be short in duration,” which he said was primarily because “they are unpopular with voters and both parties typically share the blame,” in a post on X.
However, this time around, El-Erian is concerned about political escalation. “What may make this shutdown different is that the Administration has promised ‘a lot' of firings, or what some are labeling DOGE 2.0.”
Here El-Erian is referring to Trump’s latest threats to lay off federal workers and cut Democratic-backed programs if Congress fails to approve new funding.
Former Director of the National Economic Council, Larry Kudlow held similar views, saying that there is a “silver lining in the Democrat-caused government shutdown,” and that is the potential for “mass federal layoffs.” He said that if we’re going to have a government shutdown, “we may as well go right to DOGE 2.0.”
They ‘Always Reopen’
Meanwhile, economist Peter Schiff, who’s long been critical of government spending and borrowing, took a more cynical view. “The biggest problems with government shutdowns are that they never shut down enough and the government always reopens,” he said on Tuesday, in a post on X.
Photo Courtesy: Ivan Marc on Shutterstock.com
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