Breaking News: DC Economist Gets Sandwich, Sees Negative Multiplier In Action

October 1st, 2013 at 1:07 pm

Washington, DC

The fiscal year began today, but it did so with the Federal government in partial shutdown, as Congress was unable to come to a last minute budget agreement.  While positioning has predictably begun in the battle for public opinion, early poll results suggest that the public is unhappy with the obstructionist strategy of House Republicans.

As hundreds of thousands of government workers across the country are furloughed without pay—in past shutdowns Congress has made such pay retroactive, but it is not yet known whether this will again be the case—questions have been raised about the economic impact of the shutdown.

In one indicator of the shutdown’s impact, a DC economist, upon getting a sandwich (BLT on rye, mayo) at a shop in a building with mostly federal employees, noted that business in the usually busy restaurant was almost empty.  According to the economist, the woman behind the counter who made his sandwich (and, to his delight, provided him with an extra pickle), worried aloud about her own job.

The economist sympathized with her, but as he began to explain the concept of “negative multiplier effects,” wherein reduced government spending leads to a reduction in private sector jobs, she became simultaneously alarmed and bored.

More news on the shutdown and its impact coming throughout the day.

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