USA shut down

An impasse between the USA’s  Republican House and Democrat Senate has shut down the government:

. . . Shortly before midnight, the White House budget office issued a memo instructing agencies to “execute plans for an orderly shutdown due to the absence of appropriations.”

The impasse means 800,000 federal workers will be furloughed Tuesday. National parks, monuments and museums, as well as most federal offices, will close. Tens of thousands of air-traffic controllers, prison guards and Border Patrol agents will be required to serve without pay. And many congressional hearings — including one scheduled for Tuesday on last month’s Washington Navy Yard shootings — will be postponed.

In a last-minute ray of hope for active-duty troops, Congress on Monday approved and sent to the White House an agreement to keep issuing military paychecks. But Obama warned that the broader economy, which is finally starting to recover from the shocks of the past six years, would take a substantial hit if congressional gridlock shutters “America’s largest employer.” . .

If our government shut down the rest of the world might not notice but what happens in the USA will have an international impact.

It’s already boosted our dollar.

The New Zealand dollar held its gains against the greenback on speculation a prolonged US government shutdown and an more weighty debate about the debt ceiling this month will sap demand for US dollars.

The kiwi traded at 83.04 US cents at 5pm in Wellington, holding its gains through the day from 82.84 cents late yesterday. The trade-weighted index was at 77.32, up from 77.19 the previous day.

It went past midnight in Washington, with no apparent agreement between the White House and Republicans, meaning the White House Office of Management and Budget would have ordered state agencies to begin shutting down services the government can’t pay for. A bigger threat is this month’s
deadline to lift the US$16.7 trillion debt ceiling or face possible default on debt payments. . .

There’s been several positive announcements on the New Zealand economy this week and expectations of reasonable growth.

But no matter how well we’re doing here, we’re not big enough to counter major problems in the rest of the world.

 

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