The U.S. economy suffered a $24 billion loss during the shutdown, and although the government is open again, economists predict brinksmanship will do lasting damage to the economy.
Moody’s Analytics economist Mark Zandi told CBS host Bob Schieffer on Sunday that postponing debt ceiling measures until Feb. 7, is only a temporary fix that could bring us to another budget battle and possible shutdown.
With this hanging over their heads, Zandi said, businesses and consumers can only plan a couple months at a time.
“I had expected the economy to pick up pace by the end of the year going into the next but now I think that’s very unlikely,” Zandi told Schieffer. “I think we’re stuck in this very slow growth, lackluster kind of environment.”
Zandi said lawmakers “actually openly question whether it’s okay to default on the debt and our other obligations … it makes people not only nervous here but across the globe, and ultimately that’s going to cost us in the form of a higher interest rate.”
Schieffer asked if the holiday season, usually associated with robust spending, would help.
“To move the economy forward, we need a strong consumer," Zandi explained. "If a consumer can’t rely on his or her job … they aren’t going to spend. It’s going to be a pretty weak holiday season.”
“Pervading the entire economy is this uncertainty, which I think the effects of that are corrosive, have been accumulating over the past few years,” Zandi added. “And obviously given the nature of the deal is we’re going to take this into next year, will continue.”