Fox's Dobbs Dismisses Fact That Government Shutdown Has Hurt Economy

Blog ››› ››› THOMAS BISHOP

Fox Business host Lou Dobbs downplayed the effects of the government shutdown on the U.S. economy, despite economic reports stating that the shutdown has taken $24 billion out of the economy.

Reporting on the October 16 edition of Lou Dobbs Tonight about the Senate leadership deal to end the government shutdown, Dobbs disputed White House Press Secretary Jay Carney's statement that "the economy has suffered" because of the shutdown, claiming, "The extent of just how much the economy suffered is questionable at best."

In fact, economists have reported that the government shutdown is projected to have significant negative effects on the economy. Business Insider reported that Standard & Poor's cut its "annualized U.S. growth view closer to 2% from 3%." The article added that S&P estimates "the shutdown has taken $24 billion out of the economy and cut 0.6% off of yearly fourth quarter GDP growth." 

The New York Times added that "[t]he shutdown has already led to the biggest plunge in consumer confidence since the collapse of Lehman Brothers in 2008," with ripple effects to many industries that do business with the government. The article continued:

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.

CNN host Erin Burnett showed Dobbs that it didn't take a business show host to correctly report on the shutdown's economic impact. On the October 16 edition of her CNN show, Burnett explained that Republicans "have to look in the mirror say we just cost this country $24 billion" and must pay government employees who weren't working because of shutdown-induced furloughs.

UPDATE: On the October 16 special edition of Fox News' The Kelly File, Fox Business anchor Melissa Francis said she didn't think the shutdown was "a drag on the economy":

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