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Economist Says Shutdown Perilous For N.M., May Cause Another State Recession

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File photo of the White House. (Photo by SAUL LOEB/AFP/Getty Images)

File photo of the White House. (Photo by SAUL LOEB/AFP/Getty Images)

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SANTA FE, N.M. (AP) — Heavily reliant on federal spending, New Mexico could be thrust into another recession if the partial government shutdown lasts for weeks, a University of New Mexico economist said.

Assistant professor of economics Christopher Erickson said the stakes are high for New Mexico because the state’s percentages of federal employees and military workers are higher than national averages.

New Mexico’s economic growth lags behind the rest of the country and an extended reduction in government spending and employment would have a major impact, Erickson told the Santa Fe New Mexican (http://bit.ly/156QOgL ).

He said an extended shutdown would force government workers to dip into savings for daily living expenses and curtail their discretionary spending.

The cumulative effect could tip the state back into recession, he said.

Federal installations in New Mexico include several Air Force bases as well as federal laboratories, forests, parks and monuments.

Andy Fox, general manager of a department store in Los Alamos, said local business owners hope Los Alamos National Laboratory can continue to stay open and that employees and subcontractors will be paid.

“Anytime the lab sneezes, we catch cold,” Fox said.

Another example of an affected private business is Spaceport America, which on Wednesday indefinitely postponed a scheduled Oct. 9 rocket launch from the site near Truth or Consequences.

Journalists, rocket experts and others planning to attend the event have canceled travel plans.

“We had 40 people coming for that launch, and those people now won’t be coming,” said Christine Anderson, director of Spaceport America near Truth or Consequences.

Anderson said the launch was postponed because it requires cooperation from government workers, such as the FAA to clear the airspace.

“It will happen. It wasn’t scrubbed. It just won’t happen on that date,” Anderson said.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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