This is the Cato Daily Podcast for Monday, September 30th, 2013.

I'm Caleb Brown.

A government shutdown looms as Congress and the President won't agree on a spending plan,

but far from a disaster our last experience

with a government shutdown, it didn't visibly harm the economy at all.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute explains.

The last big government shutdown was in 1995 and 96

when about 40% of federal workers were furloughed for up to three weeks in early 1996.

This time it will be a broader shutdown, about 50% of federal workers will be furloughed.

So you can go back though and look at in 1995 and 96 and that shutdown did not hurt the economy

and indeed the stock market actually rose during that shutdown.

So I think fears of some sort of economic calamity for this are pretty far-fetched.

All right, well what is it, what does a shutdown look like?

Based upon our experience in the mid 90s of course it was a big showdown between

Newt Gingrich and the Republican House and President Clinton

What shape is it likely to take? Well, the current shutdown, it's completely unknown how long it will last.

I mean, I don't know how much the House Republicans will dig in their heels.

They've, they're currently united. They have sent the last two continuing resolution

bills to the Senate completely unified so we will I'm not sure how long the shutdown won't last.

President Obama has made a big deal out of saying he will not negotiate essentially

anything on this and John Boehner to his credit I think to some extent

says well it really doesn't work that way where are these two sides in terms of

...