Well,
that storm has turned into an economic tsunami that has ripped through the
political scene in Washington.
In short
The US Congress failed to pass a budget to fund the government for the
next year on 30 September 2013. In particular, it did not agree to raise the
public debt ceiling and the US Government does not have sufficient money to pay
key Government staff.
All ‘non-essential staff’ (about 800,000 of the 2.1 million total) on the
federal workforce will be told to stay home. If there is no budget bill that is
passed by both chambers in the next week, the US Government will come to a
screeching halt also.
Historical Evidence
You will
see from the table above, the debt ceiling has been
raised without much drama in the past. Since 1960, it has been raised 78 times.
However, over the past three years, it has been used as a negotiation point for
House Republicans who have sought to extract budget concessions from Mr Obama.
To put that another way……you can have your way Barack but you must give us what
we want first.
A Big Deal?
This is
the biggest and most powerful economy in the world failing to pay Government
staff. The news, investment markets and other Governments will get very twitchy
over the next week. Expect plenty of unrest and media coverage.
Should
you be bothered? Damn right……the UK is the 51st State after all!
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