Fox Myth: Shutdown Hasn't Negatively Affected The Economy

Fox's O'Reilly: “The President Wants To Convince You That If The Economic Picture Gets Worse It's Because Of The Government Shutdown.” On the October 17 edition of his Fox News show, host Bill O'Reilly claimed that the “The president wants to convince you that if the economic state of the union gets worse it's because of the government shutdown. Not true.” He added that the real “reason the economy remains stagnant is Obamacare.” [Fox News, The O'Reilly Factor, 10/17/13]

Fox's Bolling Asks “Who's Getting To” Rating Agencies Who Point Out Economic Effects Of Shutdown. On the October 17 edition of Fox News' The Five, co-host Eric Bolling disputed Standard & Poor's claim that the shutdown took $24 billion out of the economy, then insinuated that someone's “getting to” ratings agencies like S&P and Fitch that reported on the effects and possible consequences of the shutdown. [Fox News, The Five, 10/17/13, via Media Matters]

Fox's Dobbs: The Extent Of Just How Much The Economy Suffered Is Questionable At Best." On the October 16 edition of Lou Dobbs Tonight, host Dobbs disputed Jay Carney's claim that “the economy has suffered” because of the shutdown claiming “The extent of just how much the economy suffered is questionable at best.” [Fox Business, Lou Dobbs Tonight, 10/16/13, via Media Matters]

Fox's Melissa Francis: “There Hasn't Been A Huge Hit On The Economy.” During an October 16 special edition of The Kelly File, Fox Business analyst Melissa Francis denied that the shutdown has had a “huge hit on the economy.” She added that we may hear companies claiming that their earnings are lower because of the shutdown, “but that's not true.” [Fox News, The Kelly File, 10/16/13, via Media Matters]

Fact: Shutdown Has Had Wide-Ranging Effects On The Economy

Standard & Poor's: Shutdown Has Taken $24 Billion Out Of Economy, Cut 0.6% Off Of GDP Growth. Business Insider reported that Standard & Poor's cut its “annualized U.S. growth view closer to 2% from 3%.” S&P also estimated that the shutdown “has taken $24 billion out of the economy and cut 0.6% off of yearly fourth quarter GDP growth.” [Business Insider, 10/16/13, via Media Matters]

NY Times: “The Shutdown Has Already Led To The Biggest Plunge In Consumer Confidence Since The Collapse Of Lehman Brothers In 2008.” A New York Times article pointed out the devastating effects of the government shutdown, including ripple effects to many industries that do business with the government:

The impasse over the debt ceiling has already raised the United States' short-term borrowing costs, with investors demanding triple the interest payments they demanded just a few weeks ago, in some cases. Concerns about the United States as a borrower might have a much longer and deeper effect than the shutdown, analysts think. “Even with a deal to avoid a default, the damage has been done by the fact that we have had a debate questioning whether the U.S. will pay back its debt,” Laurence D. Fink, the chief executive of the money manager BlackRock, said Wednesday morning. That means higher borrowing costs in the United States, and elsewhere. The World Bank has estimated that a similar standoff in 2011 raised borrowing costs in poor countries by about 0.75 percentage point, and that those costs remained elevated for months. [New York Times, 10/16/13, via Media Matters]

Time: “Hundreds Of Thousands Of Federal Workers Bore The Economic Brunt Of The Shutdown.” An October 17 article in Time Magazine explained that that “hundreds of thousands of federal workers bore the economic brunt of the shutdown” and “small businesses also suffered from frozen government contracts and stalled business loans.” The article outlined the economic costs of the shutdown:

About $3.1 billion in lost government services, according to the research firm IHS

$152 million per day in lost travel spending, according to the U.S. Travel Association

$76 million per day lost because of National Parks being shut down, according to the National Park Service

$217 million per day in lost federal and contractor wages in the Washington D.C. metropolitan area alone [Time, 10/17/13]

Lockheed Martin CEO: Shutdown's “Situation Of Uncertainty” Affects Company's Plans. CBS reported that Lockheed Martin, the nation's largest defense contractor, furloughed 2,400 people as a result of the government shutdown. Lockheed Martin CEO Marillyn Hewson said: “When we have a situation of uncertainty, whether it's the government shutdown and for how long, whether it's a continuing resolution, whether it happens to be sequestration, all of those things impact our business in terms of decision-making on what we're going to do with our plans going forward.” [CBS This Morning, 10/17/13]

Fox Also Downplayed The Effects Of Previous Government Shutdowns

Fox's Melissa Francis Claims It “Wasn't The Case” That Previous Shutdowns In The 1990s Harmed The Economy. On the October 1 edition of Fox News' America's News HQ, host Bill Hemmer discussed the ongoing government shutdown with Francis, who claimed that because GDP growth remained relatively strong during the 1990s shutdown, “it wasn't the case” the shutdown harmed the economy." In fact, shutdowns in the 1990s shaved 0.25 percentage points off GDP growth for the end of 1995. The Office of Management and Budget estimated that the total cost of the federal government from the shutdowns in the 1990s cost the federal government more than $2 billion in today's dollars. [Fox News, America's News HQ, 10/1/13, via Media Matters]