The US Government Partially Shuts Down


In the United States the Democrat and Republican parties are still at loggerheads in Congress over "Obamacare", and as a result many "non-essential" services have been shut down, and getting on for a million US government workers have been told to stay at home. Here's a video report from Al Jazeera on the current state of the nation in the land of the free:

Note that President Obama said that:

Congress generally has to stop governing by crisis. They have to break this habit. It is a drag on the economy.

According to Reuters:

The back and forth offered no sign that President Barack Obama and Republicans can soon end a standoff over health care that has sidelined everything from trade negotiations to medical research and raised new concerns about Congress's ability to perform its most basic duties.

An even bigger battle looms in coming weeks, when Congress must raise the debt limit or risk a U.S. default that could roil global markets.

Stock investors appeared to be taking the news in their stride with investors confident a deal could be reached quickly. The S&P 500 closed up 0.8 percent and the Nasdaq Composite gained 1.2 percent. But the U.S. Treasury was forced to pay the highest interest rate in about 10 months on its short-term debt as many investors avoided bonds that would be due later this month, when the government is due to exhaust its borrowing capacity.

If Congress can agree to a new funding bill soon, the shutdown would have little impact on the world's largest economy. A week-long shutdown would slow U.S. economic growth by about 0.3 percentage points, according to Goldman Sachs, but a longer disruption could weigh on the economy more heavily as furloughed workers scale back personal spending. The last shutdown in 1995 and 1996 cost taxpayers $1.4 billion, according to congressional researchers.

I wonder what China thinks about the prospect of  "a U.S. default"? Watch this space for more news, but don't hold your breath waiting for the warring parties to come to an amicable solution any time soon.

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