June 20, 2018
Opinion Latest News | Poll Questions | Family Separations | Boston TV | LePage Troops

Tea party actions have consequences — like, potentially $72 million for Maine

BDN staff photo by Bill Trotter | BDN
BDN staff photo by Bill Trotter | BDN
A sign outside an inn on Route 3 in Trenton conveys a message to Congress about the federal government shutdown and the resulting closure of Acadia National Park on Mount Desert Island. Area hotels and other lodging businesses have been losing customers because of the park's closure, according to business officials.


This month’s 16-day, partial federal government shutdown wasn’t the longest in U.S. history. But that doesn’t mean the shutdown of 2013 was devoid of consequences. Far from it.

Forget, even, the effect of the shutdown on Americans’ faith in the ability of their federal government to function. Consider that, at a time when Maine and the nation are struggling to regain the ground lost during the great recession, the shutdown was an economic blow.

Just as the shutdown concluded, an exasperated-sounding Standard & Poor’s estimated the size of that economic blow to be $24 billion subtracted from the nation’s economic output due to the shutdown.

“In September, we expected 3 percent annualized growth in the fourth quarter because we thought politicians would have learned from 2011 and taken steps to avoid things like a government shutdown and the possibility of a sovereign default,” S&P wrote in a news release. “Since our forecast didn’t hold, we now have to lower our fourth-quarter growth estimate to closer to 2 percent.”

A default, according to S&P, would have sent the U.S. economy into recession and wiped out much of the progress made since the end of the last recession.

It’s all to say, the actions of the tea party Republicans who held government hostage to their demands had an effect — and a highly counterproductive one at that. And what demands were those, again? Obamacare defunding? Social Security and Medicare reform? Massaging Sen. Ted Cruz’s ego? We’re not quite clear, and the GOP doesn’t seem to be, either.

We don’t have an aggregate gauge of the economic damage inflicted on Maine by the shutdown. But if we apply the same S&P projections to Maine’s economic output, we can get a crudely calculated measure of the shutdown’s effect on the Pine Tree State.

If we take S&P’s estimate of a $24 billion hit and calculate Maine’s portion — the Pine Tree State accounts for 0.3 percent of the nation’s economy — we get $72 million.

Or, a more conservative estimate using projected changes to Maine’s estimated growth rate before and after the shutdown puts the damage at $45.99 million.

It’s a rough estimate, but that $46 million could have been spent on Maine businesses or helped Maine people save for college and retirement.

Like any state, the effect in Maine was felt hard by federal employees — civilian and noncivilian — located here. The closure of Acadia National Park is thought to have prevented $1 million in in-park spending during the peak of foliage season. And Maine ranks high on the list of states whose businesses are dependent on lending from the Small Business Administration, which came to a stop during the shutdown.

The effect would only have become more severe if the shutdown continued. A study by WalletHub, which ranked Maine fifth for states most affected by a shutdown, noted Maine’s higher-than-average reliance on Social Security and veterans’ benefit payments due to the state’s large populations of seniors and veterans. Had the shutdown continued past the end of October, those lifeline payments would have been in jeopardy.

So, what’s the takeaway from tens of millions of dollars lost in economic output for a state with a stagnant economy?

If the Republican Party is in the mood of sorting out its differences — if one wing of the party wants to overtake the rest — don’t take a fragile economy hostage to do it.

Have feedback? Want to know more? Send us ideas for follow-up stories.

You may also like