Every major economic indicator in the United States improved during and after the Clinton-era government shutdown that has dominated news analysis columns throughout the “defund Obamacare” debate.
Although the spending gaps that occurred from November 1995 to January 1996 are depicted almost unanimously by politicians and the establishment media as disasters for the United States, in fact the so-called shutdowns, during which a portion of government spending was temporarily reduced, did no discernible damage to the American economy, and may have boosted the financial well-being of the American people.
“I mean whatever effect Obamacare might have on the economy is far less than even a few days of government shutdown,” President Obama declared in a speech to supporters Thursday, giving a characteristic point of view that seems to be shared by a majority of Americans, who strongly oppose a government shutdown.
A review of economic performance, however, tells a very different story. The spending gaps of the Clinton presidency occurred from Nov. 14 through Nov. 19, 1995 and from Dec. 16, 1995 to Jan. 6, 1996.
Despite the greatly ballyhooed furloughs of government employees, unemployment stayed even at 5.6 percent during November 1995, the period of the first spending gap, which ended when a deal cut by President Bill Clinton and Republican legislators allowed government to stay funded at 75 percent.
Unemployment actually dropped to 5.5 percent during the second spending gap, which was more complete than the first.
Unemployment continued to plummet in the months following the shutdown, as a hamstrung Clinton allowed the rate of government spending increases to slow and headed toward the eventual budget surpluses that became the highlight of Clinton’s legacy. According to the Bureau of Labor Statistics, unemployment dropped half a percentage point within a year of the first shutdown and had dipped below five percent by the spring of 1997.