Economists Analyze Impacts of Federal Shutdown on California Economy

Some economists note that certain public assistance programs were funded through October, but a prolonged shutdown would have put them at risk.

 “Then funding for a number of programs does indeed come into question,” says H.D. Palmer with the Department of Finance. “For example, things like the supplemental nutrition assistance program, what used to be called food stamps.” 

Palmer says a prolonged shutdown could have also affected the state budget. Michael Bernick, former Director of the California Employment Development Department, says the shutdown directly impacted furloughed federal workers and the businesses that relied on them.

 “Any of the departments are going to have spin-off impacts because each of those people are spending money on services often near where they work,” says Bernick.

Economists say if the debt ceiling hadn’t been raised, it could have made people wary of investing in California.