Fox Ignores History To Claim Last Shutdown Didn't Harm Economy

Fox Business host Melissa Francis erroneously claimed that previous government shutdowns in the 1990s did not harm the economy, a notion that is in direct opposition to economic evidence.

On the October 1 edition of Fox News' America's News HQ, host Bill Hemmer discussed the ongoing government shutdown with Francis. During the discussion, Francis chided President Obama for claiming that previous shutdowns in the 1990s harmed the economy, claiming that data show “that wasn't the case.”

Francis' argument rested upon the fact that over earlier shutdowns, GDP growth remained relatively strong and stabilized at levels above pre-shutdown rates. The Daily Caller presented a similar argument in an article on September 29, claiming the “economy boomed” during previous shutdowns.

While Francis is correct that growth remained strong over the 1995 and 1996 shutdowns, this doesn't answer the question of what growth would have been like in absence of a shutdown.

According to Joel Prakken, senior managing director at Macroeconomic Advisers, those shutdowns shaved 0.25 percentage points off GDP growth for the end of 1995, mostly due to federal employee furloughs. Furthermore, the Office of Management and Budget estimated that the total cost to the federal government from those shutdowns at more than $2 billion in today's dollars.

While Francis is quick to dismiss that economic growth would be affected in the current shutdown, independent analysis shows this is not the case. According to Bloomberg:

Mark Zandi of Moody's Analytics Inc. estimates a three-to-four week shutdown would cut growth by 1.4 points. Zandi projects a 2.5 percent annualized pace of fourth-quarter growth without a shutdown. A two-week shutdown starting Oct. 1 could cut growth by 0.3 percentage point to a 2.3 percent rate, according to St. Louis-based Macroeconomic Advisers LLC.

Right-wing media outlets have been scrambling to downplay the effects of the current government shutdown, often by ignoring an array of evidence to the contrary.