Andrew Gelman thinks both parties "(a) don’t want a shutdown, but (b) know the other side doesn’t want it either, which means they can try to threaten a shutdown and extract concessions":

[I]n 1995 we were not in recession, so it wasn’t so natural to believe that a government shutdown would have much short-term economic effect.  Second the idea that the economy determines presidential elections wasn’t so generally accepted back then.  Also, I suspect that Gingrich et al. deluded themselves regarding Bill Clinton’s popularity. 

Nowadays we tend to think of Clinton as a political whiz, but if you take yourself back to 1995, you see a guy who snuck into the presidency with 43% of the vote in a three-way race, then proceeded to fail on health care and fight with his own party on NAFTA, and then got killed in the midterms.  So congressional Republicans at that time could be excused for thinking that Clinton was a sitting duck.

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