Bloomberg Talks Nobel Laureate Paul Krugman Talks Economic Impact of US Government Shutdown
Nov 10, 2025
Nobel laureate Paul Krugman, renowned economist and professor, joins the discussion on the economic fallout from the US government shutdown. He highlights the unprecedented low in consumer sentiment and critiques the proposal for $2,000 checks as fiscally irresponsible. Krugman also addresses the complexities of measuring economic impact due to disruptions like air traffic control issues and concerns over delayed economic reports, cautioning about a 'ghost month' affecting labor and inflation data.
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Travel Disruption Made The Shutdown Tangible
- Romaine Bostick described personal travel disruption returning from the weekend as evidence the shutdown matters.
- Krugman agreed and noted practical disruptions like air traffic control aren't well quantified but meaningful.
Government Shutdowns Can Disrupt Core Services
- A functioning government is necessary for a functioning economy beyond standard macro metrics.
- The 41-day shutdown showed significant disruption and hinted six months would be severely damaging.
Health Insurance Changes Will Bite Household Budgets
- Expiring enhanced ACA benefits are causing average premium jumps of about 114% per Kaiser Family Foundation.
- That insurance shock will hit family finances and likely produce broader economic spillovers.