U.S.government shutdown 2013

U.S.government shutdown 2013

 On October 01, 2013, the United States federal government entered a government shutdown, forcing furloughs of 800,000 workers and suspension of services not exempted by the Antideficiency Act. Because Congress did not enact regular appropriations or a continuing resolution for the 2014 fiscal year, appropriations have lapsed and about 800,000 federal employees were indefinitely furloughed without pay, while another 1.3 million were required to report to work without pay until an appropriations bill is passed or their function is no longer excepted. The most recent previous U.S. federal government shutdown was in 1995–96. 

Government Shutdown Could Cost $300M Per Day 


 The United States Constitution requires government spending be approved in bills passed by the United States Congress. Some government functions such as the Federal Reserve System are completely self-funded. Others, like Social Security and Medicare are partially self-funded but may be subject to administrative shutdowns and failures of the government to meet its financial obligations. Some programs are fully or partially funded for multiple years and some are funded every year. All funding comes from the Congress expressing its will through law. This is the power of the purse given exclusively to Congress by the United States Constitution. The legislation that sets government spending is called appropriations legislation. Since the 1990s, Congress has often failed to pass the twelve to thirteen appropriation bills that set government-wide spending, often passing "Continuing resolutions," to extend existing spending law at or near current levels, and "omnibus" bills that combine many appropriations bills into one. Budget negotiations can be difficult when the president is not of the party that controls one or both houses of Congress. The last budget was passed on April 29, 2009. If the Congress fails to pass budgetary approval by the end of the fiscal year, a "funding gap" results. The Antideficiency Act requires government functions not excepted by the Act to begin shutting down immediately so that the Constitutional authority of Congress over spending is not breached. The Office of Management and Budget provides agencies with annual instructions on how to prepare for and operate during a funding gap according to the Antideficiency Act. Technically, seventeen federal government shutdowns precede the current one. Most were partial or for single days or weekends and involved few if any furloughs. The first was in 1976. Only the shutdowns of 1995–96 involved the whole federal government and were longer than four days. If being prolonged to stop a functioning of the administration like a stop of infrastructure improvement in a national land, increasing public-servants being temporarily laid off without pay and a suspension of the reducing poverty project, etc., it causes a serious problem in USA. Also some intelligence organizations like CIA has enforced to stand by at home against 70% civilian regular employees. 

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 Spy agencies forced to furlough 70% of civilian staff    


 Analysts are concerned that the political gridlock will extend into mid-October, when Congress and the President must agree to raise the debt ceiling to avoid the prospect of defaulting on the public debt. Following the debate over the debt ceiling in May 2013, the Treasury Department was forced to engage in extraordinary measures to fund the government. In August 2013, the Treasury informed Congress that the extraordinary measures would be insufficient starting in mid-October and further specified, in late September, that the U.S. would begin to default on its debts if a new debt ceiling was not approved by October 17. 
 On October 2, President Obama explicitly linked the government shutdown to the debt ceiling issue, stating that he would not reopen budget talks until Republicans pass a bill raising the debt limit. The government-shutdown has economically a serious bad influence. But the market prices of the financial market has not fallen suddenly. This is because of the number of investors -who underrating the government-shutdown ends within 1 week only- is much in the market. 

 The investing public, if anything, has not considered to fall in price because of the FRB will not diminish the Quantitative easing if a slowdown in economic-growth expands to all across the United States by the government-shutdown. Now, the financial-market of USA has been moving without regard for the actual economy of USA. 

John Yarmuth: Government Shutdown to Last 7-10 Days      

 According to what people say, there has been forecasted by many voices that the government-shutdown will be ended within a short time. The Republican Party has insisted that"Unless until the government delays to start the Obamacare, the Republican Party does not ensure the passage of the budget for next year 2014". 
 And, the Republican Party has criticized the Obamacare with saying that"the Obamacare is an unnecessary and inefficient health care system. So, the government should abolish the Obamacare". The Democratic Party has refuted that"To start the Obamacare is a benefit for all the people. So, the Republican Party hindering and obstructing its plan is a cold-hearted and unfeeling party. The dispute between the Democratic Party and the Republican Party has been never on the same wavelength. As a result, the government-shutdown will be entered to the second week. If it becomes so, the situation that the National Treasury of U.S.government becomes empty on 17 October will become a reality. And, the government will become less able a payment of interest of the government-bonds. As a result, the government goes into default.



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 Government Shutdown 2013 


 U.S.government may possibly avoid to rise sharply the interest of the government-bonds by pretending a non serious situation -not go into default- through the mass-media. But, When the S&P downgraded the U.S.government bond being on the verge of a default on summer 2011, there had been repeated to operate a sharp decline of the stock-market for defending the bond market. There will be likely to happen an unpredictable bad affair like a sharp drop in the stock market, etc in the financial market. Also this time, the S&P said that"If the government-shutdown continues for a long-term after 17 October, they will consider to downgrade the U.S.government-bonds. The Moody's Corporation has kept silent on this time too.  

 S&P Threatens To Cut US Debt To Junk  

 The market price of the 10 years long-term government bonds has risen and its interest-rate(%) has lowered. But the market price of the one month short-term government bond is already a poor demand on the ground that its repayment days becomes a period after 17 October -the government has not funds-. So, its price -short-term government bond- has fallen.  

 Treasurys fall; one-month T-Bill yield spikes   　

 If the U.S.government-bonds goes into default or goes into the situation of being extremely close to the state of being default, the BRICs countries gives up hopelessly U.S.dollar as a key currency. And the BRICs will likely to accelerate running out of U.S.dollar after reconsidering the conventional key-currency system as an international settlement currency. After this, the BRICs will expand to use each currency of theri countries.  

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America flirts with self-destruction  

 If the U.S.Congress revises the law which deciding a maximum amount of the government's cumulative fiscal deficit, the U.S.government can issue additional bonds. ....and can use it for a payment of its interest for issued-bonds. As a result, the government can avoid the default crisis. But the Republican Party -the majority of the House of Representatives- has refused the revised proposal of the Obama administration with saying that"Unless until the government delays to implement the Obamacare, the Republican Party does not ensure the passage of the budget for next year 2014".  

Obama: No deals on raising debt limit   



 The Tea Party of the Republican Party is a group which has longed small government against the Federal Government. So, the Federal Government-shutdown is a boon for them. Government Shutdown:  

The Next Step In The Collapse Of The dollar?  



 The Tea Party has thought that If the Federal Government will go into default, they can not increase the deficit farther. ...and it is a favorable opportunity to construct small governments. Some supporters of the Republican Party has begun a signature-collecting campaign seeking to take back the authority of the Federal Government on this occasion. 



 The thinking of the Tea Party is to return the authority to each local area like a grass root.    

 A Petition To Permanently Shutdown Washington   

 Washington shutdown looms as deal hopes fade       

 Office of Management and Budget Director Sylvia M. Burwell, on September 17, 2013, mandated an update for each federal agency's contingency plan which designates excepted agency operations, as required by the Antideficiency Act for a potential funding gap and shutdown. Burwell stated: "There is enough time for Congress to prevent a lapse in appropriations, and the Administration is willing to work with Congress to enact a short-term continuing resolution to fund critical Government operations and allow Congress the time to complete the full year 2014 appropriations. However, prudent management requires that agencies be prepared for the possibility of a lapse." During the shutdown, most "non-excepted" government employees are furloughed. This puts about 800,000 public servants on indefinite unpaid leave starting October 1. The White House estimates that a one-week shutdown could cost the US economy $10 billion. "A shutdown", President Barack Obama stated, "will have a very real economic impact on real people, right away." Key government functions, such as air traffic control, stay active under emergency funding statutes, though other related functions (such as training and support of these services) are suspended. Some agencies and departments—such as the United States Department of Veterans Affairs and Social Security Administration—are funded by long-term or mandatory appropriations and are also largely unaffected. The United States Postal Service is self-funded and will continue normal operations. On October 05, the House unanimously passed a bill that would provide back pay to all furloughed federal employees after the shutdown is resolved, and Obama stated that he would sign the bill into law. Rep. Elijah Cummings said "Our hard-working public servants should not become collateral damage. This is not their fault and they should not suffer as a result." 


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