[Jtsummers]

800k middle class people not getting a paycheck is actually a pretty sizable hit to the economy. The average federal salary is a bit over $80k. Rounding down, that's about $3000 in the average federal paycheck. So you're looking at around $2.4 billion taken out of the economy over the past couple weeks (their second missed paycheck is coming up on Friday, so double that).

[AnthonyMouse]

That isn't really what happens though. For the people who are still working, they get paid retroactively once they pass a budget. So they live on savings or borrow money for a while, which is no fun for them but is what actually happens, and then replace most of that money when they get the back-pay. The actual loss is what they lose in interest over that period of time, which is a small fraction of the total.

For the workers who are actually sent home and correspondingly never get paid, that means the government still has the money it would have had to pay them. So either it goes back to the taxpayer (in theory) or more likely they find some other way to spend it. Either way it goes back into the economy again.

So it's not about the money.

There are some other issues though. One is you lose whatever value the government employees were providing. Though this is mostly the broken window fallacy. If you give someone a month off, they may still do something productive with it -- work a temporary job, catch up on home repairs, take a vacation or attend a conference etc. Whether or how much this is less or more productive overall than their government work is a case by case determination, but it's not as if typical government work is renowned for its efficiency.

Another issue is that if it extends for too long, the furloughed employees will find other work permanently. That can be a problem if you only have to turn around and pay recruitment and training costs to replace them again. On the other hand, it may actually help to thin the herd -- it's a lot easier to reduce or eliminate inefficient programs after some or all of the people who normally lobby to keep their jobs are already gone.