St. Louis Fed President: Shutdown ‘Not That Big a Deal’ for Economy

The government shutdown didn’t hurt the economy much after all. That was the assessment of St. Louis Fed President James Bullard in a Nov. 4 CNBC interview.

“I don’t think it’s gonna to have that big of an impact on growth. … It’s probably not that big a deal,” said Bullard on “Squawk Box.”

He explained that spending and contract work delayed by the shutdown would still take place by the end of 2013. “Those furloughed people are getting back pay and the contractors are just going to have to work somewhat longer in the next quarter,” added Bullard.

The news media have pushed a very different narrative. Fox’s liberal Geraldo Rivera [1], NBC’s Savannah Guthrie [2], and ABC’s Shushannah Walshe [3] touted a Standard & Poor’s estimate that the shutdown cost the economy $24 billion. “The financial ratings agency Standard & Poor’s said Wednesday the shutdown ‘to  date has taken $24 billion out of the economy,’ equaling $1.5 billion dollars a day and ‘shaved at least 0.6 percent off annualized fourth-quarter 2013 GDP growth,’” wrote Walshe on Oct. 17. The Washington Post’s Dylan Matthews predicted economic contraction [4] before the shutdown even ended.

Bullard is certainly not an outspoken conservative. On the same broadcast of “Squawk Box,” he downplayed concerns over inflation, praising quantitative easing. In June 2013, Bullard argued against setting a timeline to end Fed stimulus in an interview with The Washington Post [5].