Debt deadline: What happens, what you should do
October 15, 2013 7:19 AM PDT Is This Senator Mitch McConnell’s Moment? October 15, 2013 7:04 AM PDT White House Expects Market Panic to Spark Deal October 14, 2013 10:07 AM PDT What’s Unique About Sen. Harry Reid? October 14, 2013 10:01 AM PDT Shutdown Delays Federal Court Cases October 14, 2013 7:20 AM PDT With cash flow to the federal court system halted during the government shutdown, civil cases are feeling the most immediate impacts. Sequestration Is Back in Center of Budget Battle October 14, 2013 7:20 AM PDT Reid: Productive Conversation With McConnell October 14, 2013 7:20 AM PDT White House, GOP commit to talks on avoiding debt default October 11, 2013 House GOP, White House Seeking End To Budget Fight October 11, 2013 12:19 PM PDT Starbucks petition urges Congress to end shutdown October 11, 2013 Could it Be? Compromise in Washington? October 11, 2013 10:49 AM PDT Negotiations Begin Over Debt Deal October 11, 2013 7:40 AM PDT Carney: Obama Happy to See Cooler Heads Prevailing October 10, 2013 11:24 AM PDT Republicans offer plan to extend debt ceiling October 10, 2013 11:05 AM PDT Boehner: ‘The President Doesn’t Want to Talk’ October 10, 2013 9:14 AM PDT House Speaker John Boehner offered a short-term extension of the debt ceiling Thursday. Is the Affordable Care Act Off the Table? October 10, 2013 9:16 AM PDT Starbucks offers free coffee amid government shutdown October 9, 2013 Washington DC mayor protests government shutdown October 9, 2013 12:20 PM PDT Washington (UNITED STATES) (AFP ) (AFP) – The mayor of Washington, DC, and residents protest the budget gridlock in Congress. While the shutdown continues, the federal capital remains unable to access the funds it collects through its own taxes and the ci Now telemarketers are free to call you thanks to government shutdown October 8, 2013 3:04 PM PDT Now telemarketers are free to call you thanks to government shutdown Government Shutdown Continues, No Progress To Break Stalemate October 8, 2013 3:54 PM PDT Government Shutdown Continues, No Progress To Break Stalemate Video: How government is like the elevator operator October 9, 2013 7:09 AM PDT Chicago Tribune columnist John Kass and reporter Jenniffer Weigel talk Senate elevator operators. service members killed in combat is adding to the already existing anger over the partial federal government shutdown. Video: Government shutdown, Day 8 October 8, 2013 7:13 AM PDT Oct. 8 (Bloomberg) — Stalemate enters an eight day, as the Senate works on a new plan and continuing questions on the number of votes in the House for a clean resolution. Shutdown Enters 7th Day October 7, 2013 12:04 PM PDT Armed Forces Network Affected by Government Shutdown October 6, 2013 10:19 AM PDT Howie Long on how the government shutdown affects troops. The Government Shutdown: The Effects On Travel October 5, 2013 7:15 AM PDT The Government Shutdown: The Effects On Travel Government shutdown could stunt economy’s growth October 4, 2013 3:14 PM PDT Government shutdown could stunt economy’s growth Pentagon to Call Back Civilian Workers October 7, 2013 6:57 AM PDT The U.S. Defense Department plans to call back most of the civilian employees it furloughed last week under the federal government shutdown. Gov’t shutdown enters 7th day October 7, 2013 6:57 AM PDT The partial government shutdown is entering its seventh day. Veterans Affairs employees not receiving pay during shutdown October 4, 2013 9:40 AM PDT Veterans Affairs employees are still working during the government shutdown, but some are not getting paid. Shutdown Hits Low-income Food Plan October 3, 2013 3:30 PM PDT Nine million low-income women and children rely on the federal Women, Infants and Children program _ a food program that’s now jeopardized by the gov’t shutdown. Without new funds, states say programs can stay open for just another few weeks. (Oct. 3) FEMA workers recalled despite shutdown for tropical storm October 3, 2013 3:34 PM PDT FEMA workers recalled despite shutdown for tropical storm Why federal employees working through shutdown could cost taxpayers BILLIONS October 3, 2013 3:30 PM PDT Why federal employees working through shutdown could cost taxpayers BILLIONS Shutdown Could Jeopardize School Field Trips To D.C. October 3, 2013 5:05 PM PDT Shutdown Could Jeopardize School Field Trips To D.C. Obama Pins Government Shutdown on Boehner October 3, 2013 9:25 AM PDT President Barack Obama says House Speaker John Boehner is the only thing standing in the way of reopening the federal government. Obama is speaking at a small business just outside of Washington on the third day of the shutdown. (Oct. 3) Government Shutdown: Stalemate Continues in Washington October 3, 2013 11:35 AM PDT The U.S. government has been shutdown for three days, and congressmen are no closer to agreeing on a budget. Eric Spillman reports from LAX for the KTLA Morning News on Thursday, Oct. 3. Ireland Baldwin Studies Politics During Government Shut-Down October 3, 2013 12:30 PM PDT The 17-year-old model and daughter of Alec Baldwin and Kim Basinger might seem to have a life of luxury. But let’s not forget she’s also just a normal high schooler who does her homework just like any other kid her age. Obama blasts ‘reckless Republican shutdown,’ warns of debt-ceiling danger October 3, 2013 Cantor: Democrats Must Negotiate to End Shutdown October 3, 2013 8:25 AM PDT As the partial government shutdown entered its third day, House Republicans again called on President Barack Obama and Senate Democrats to ‘sit down at the table’ and work out differences over ‘Obamacare.’ Democrats insist that’s a non-starter. (Oct. 3) Government Shutdown: Stalement Continues in Washington October 3, 2013 7:05 AM PDT No resolution seemed near as the government shutdown entered its third day. KTLA’s Eric Spillman reports from LAX on Oct. 3, 2013. Anger, Frustration Continues Over Government Shutdown October 2, 2013 10:00 PM PDT Anger, Frustration Continues Over Government Shutdown How the Government Shutdown Could Affect Your Ability to Get a Mortgage October 2, 2013 11:35 PM PDT How the Government Shutdown Could Affect Your Ability to Get a Mortgage Federal employees protest government shutdown October 2, 2013 1:15 PM PDT Washington (AFP) – The Federal employees protest the government shutdown as Congress’ inability to approve a budget has closed capital-area museum and monuments. Duration: 01:14 Local Workers Hurt By Fed Government Shutdown October 2, 2013 4:00 PM PDT Local Workers Hurt By Fed Government Shutdown Boehner: House Wants Government Open October 2, 2013 1:58 PM PDT Film Industry Affected By Government Shutdown October 2, 2013 1:00 PM PDT Film Industry Affected By Government Shutdown Government shutdown moves into second day October 2, 2013 Day 2 of government shutdown: Republicans and Democrats continue to spar October 2, 2013 5:30 AM PDT Day 2 of government shutdown: Republicans and Democrats continue to spar Obama to hold budget talks with top congressional leaders October 2, 2013 Stocks Resilient to Gov’t Shutdown October 1, 2013 11:40 AM PDT The partial shutdown of the U.S. government failed to spook markets Tuesday, with stock indexes rising around the world. Analysts say significant damage to the U.S. economy is unlikely unless the shutdown lasts more than a few days. (Oct. 1) Obamacare Begins as Government Shuts Down October 1, 2013 9:49 AM PDT The first shutdown of U.S. government in 17 years began Tuesday at 12:01 a.m. eastern time, after lawmakers in Congress failed to reach a deal on the federal budget. Vets Cross barricades despite shutdown October 1, 2013 12:40 PM PDT A group of veterans walked past barriers at the closed World War II memorial in Washington with help from members of Congress. Hundreds arrived for a previously scheduled visit to the memorial to find it barricaded by the National Park Service. (Oct. 1) Senators Trade Barbs on Government Shutdown October 1, 2013 9:10 AM PDT One conservative House Republican is predicting that the partial shutdown of the government that began today will drag on. In the Senate, party leaders each blamed the other party for the shutdown.
Dow jumps more than 200 points on debt deal
But just for now. President Barack Obama signed a bill that ends the 16-day partial government shutdown and raises the debt ceiling, the White House said early Thursday morning. Weeks of bitter political fighting gave way to a frenzied night in Washington as Congress passed the bill that would prevent the country from crashing into the debt ceiling. Lawmakers worked precariously close to the midnight debt ceiling deadline amid warnings the government could run out of money to pay its bills if it didn’t raise the debt ceiling. Federal workers should expect to return to work Thursday morning, the director of the Office of Management and Budget said. Director Sylvia Mathews Burwell said employees should check the Office of Personnel Management’s website for updates. Yosemite National Park said it was already resuming operations Wednesday night. The GOP-led House gave the final stamp of approval to the Senate-brokered bill, passing it easily late Wednesday night. But it wasn’t Republicans who made it happen; a majority of that party’s caucus actually voted against the measure, which only passed because of overwhelming Democratic support. A temporary bandage The debt cushion now extends through February 7, with current spending levels being authorized through January 15. That means a few months of breathing room, but little more. After all, the bill doesn’t address many of the contentious and complicated issues — from changes to entitlement programs to tax reform — that continue to divide Democrats and Republicans. “We think that we’ll be back here in January debating the same issues,” John Chambers, managing director of Standard and Poor’s rating service, told CNN on Wednesday night “This is, I fear, a permanent feature of our budgetary process.” The heads of the Senate and House budget committees — Democratic Sen. Patty Murray of Washington and GOP Rep. Paul Ryan of Wisconsin — will meet Thursday with an eye on addressing these budget divides. They’ll helm budget negotiations intended to come up with a broader spending plan for the rest of fiscal year 2014, which ends on September 30. Obama, for one, didn’t seem in the mood Wednesday night for more of the same — saying politicians in Washington have to “get out of the habit of governing by crisis.” “Hopefully, next time, it will not be in the 11th hour,” Obama told reporters, calling for both parties to work together on a budget, immigration reform and other issues. As he left the podium, Obama was asked whether he believed America would be going through all this political turmoil again in a few months. His answer: “No.” Come together The past 16 days of the partial government shutdown have come at a steep cost. Standard and Poor’s estimated it took $24 billion out of the economy. The possibility of a debt default — something that, Chambers pointed out, is gone for now but not entirely — spooked investors on Wall Street and hiked interest rates. And then there’s the impact the ordeal had on politicians’ image. If there’s one thing polls showed Americans agreed on, it’s that they don’t trust Congress — with Republicans bearing more blame than anyone else for what transpired. Both sides talked past each other continuously, with Republicans insisting for a time that defunding, delaying or otherwise altering Obamacare must be part of any final deal. Democrats, meanwhile, stood pat in insisting they’d negotiate — but only after the passage of a spending bill and legislation to raise the debt without unnecessary add-ons. In the end, Democrats largely got what they wanted — after some last-minute talks by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell. “We’ve been able to come together for a lot of different reasons,” said Reid, a Nevada Democrat. Republicans did get a small Obamacare concession: requiring the government to confirm the eligibility of people receiving federal subsidies under the health care program. But while some Republicans, such as tea party favorite Sen. Ted Cruz, claimed moral victories in energizing their movement, House Speaker John Boehner didn’t pretend his side was the victor. “We fought the good fight; we just didn’t win,” Boehner told a radio station in his home state of Ohio. Democratic Sen. Chuck Schumer of New York blasted Cruz and the rest of the tea party wing in Congress for what he called the “reckless, irresponsible politics of brinksmanship over the last few weeks.” “It was not America’s finest moment,” he said. Markets soar on agreement News of the deal brought some relief to Wall Street as well as Washington, with pressure to resolve the impasse building with the approach of the Thursday deadline to raise the debt ceiling or face default. U.S. stocks rose on the news of an agreement, with the benchmark Dow Jones Industrial Average jumping more than 200 points on the day. Reid hailed the agreement he worked out with McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.” McConnell fired an opening salvo for the budget talks expected to begin soon and continue until December when he said any ensuing spending deal should adhere to caps set in a 2011 law that included forced cuts known as sequestration. “Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington. The focus on an agreement shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans. Rep. Charles Rangel compares tea party in House to ‘confederates’ Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund the health care reforms known as Obamacare to previous proposals intended to end the shutdown.
Obama signs bill to end partial shutdown, stave off debt ceiling crisis
Post to Facebook Dow jumps more than 200 points on debt deal on USATODAY.com: http://usat.ly/1gjZnvO Incorrect please try again A link has been posted to your Facebook feed. Sent! A link has been sent to your friend’s email address. 37 To find out more about Facebook commenting please read the Conversation Guidelines and FAQs This story is part of Government shutdown Punchlines: End of the shutdown Dow jumps more than 200 points on debt deal Senate leaders announced a last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after a partial, 16-day shutdown. Wall Street rallied on the news. AP Adam Shell, USA TODAY 7:23 p.m. EDT October 16, 2013 Traders on the floor of the New York Stock Exchange on Tuesday. (Photo: Richard Drew, AP) House agrees to move Senate debt ceiling deal S&P 500 index gains 1.4% Nasdaq surges 45 points to 3,839 SHARE 301 CONNECT 123 TWEET 37 COMMENTEMAILMORE NEW YORK The big bet on Wall Street that fueled Wednesday’s stock market rally proved to be correct as top Senate leaders say they have struck a bipartisan deal to reopen the government and extend the nation’s debt ceiling. The Dow Jones industrial average jumped 205.82 points, or 1.4%, to 15,373.83 and the Standard & Poor’s 500 index gained 23.48 points, or 1.4%, to 1,721.54. The S&P 500 is now only four points below its record close of 1,725.52 set Sept. 18. The Nasdaq composite index surged 45.42 points, or 1.2%, to 3,839.43, a fresh 13-year high. The deal likely marks the end of a debt impasse that has shut down the government for 16 days. It will also remove the threat of the nation defaulting on its debts for the first time in history and reduce the level of market uncertainty. It also, of course, needs to be ratified by votes in both houses of Congress and signed into law by President Obama. House leaders said they would accept it and allow a vote on the bill. DEBT DEAL: 5 things to know about debt-ceiling deal The deal calls for the government to reopen and be funded through Jan. 15 and the debt ceiling to be extended through Feb. 7. If the deal closes, investors will breathe a big sigh of relief and refocus their attention on more mundane matters such as corporate earnings and the economy, says Nicholas Sargen, chief investment officer at Fort Washington Investment Advisors. “If a default is ruled out (by a “Yea vote), the market will say it’s time to refocus on business fundamentals,” says Sargen, adding that he doesn’t think the nearly three-week budget fight will cause “lasting damage to the economy or the nation’s financial reputation.” Stocks have held up fairly well during the government shutdown, a sign that Wall Street was correctly betting that Washington would reach an agreement. The market began to price in a positive resolution last week, fueling a big market rally that saw the Dow climb more than 500 points. ‘LONDON WHALE’: Costs JPMorgan another $100M Whether stock prices will skyrocket even more is in question, given the market’s sharp rise in anticipation of the crisis ending without financial calamity, says Rod Smyth, chief investment strategist at Riverfront Investment Group. “The market never panicked and never priced in the bad scenario, so it’s unlikely to storm away to the upside if we get a resolution,” says Smyth. While stocks shot up, investor fear took a big dive. A closely watched Wall Street fear gauge fell by 20% on news that a deal had been worked out. The key reason investors thought a deal would get done: the fallout of a U.S. default would be so unpredictable and potentially damaging to the financial system that few people on Wall Street believed Congress would let such a self-inflicted wound occur. “We have to assume that it is in no one’s interest for the government to default,” says Rob McIver, co-portfolio manager at Jensen Quality Growth Fund. The market for U.S. Treasury bills reflected relief among bond investors. The yield on the one-month T-bill dropped to 0.13% from 0.40% Wednesday morning, an extraordinarily large move. The decline means that investors consider the bill, which would have come due around the time a default may have occurred, to be less risky. This type of short-term bond is typically referred to as a risk-free asset, but investors had been selling these bills because they are the most likely government security to be hit by a U.S. default, according to Boris Rjavinski, an interest rate strategist at UBS. The yield on the 10-year Treasury note edged down to 2.67% from 2.74% Tuesday. Yields on longer-term U.S. government debt haven’t moved as much as those on short-term debt because investors believed that the government would work out a longer-term solution. MATTEL: Monster High, Barbie boost results In overseas trading, the Nikkei 225 Stock Index closed up 0.2% to 14,467.14, however Hong Kong’s Hang Seng fell 0.5% to 23,228.33. Similarly, key European stock indexes closed mix. Britain’s FTSE 100 index rose 0.3% to 6,571.59. Germany’s DAX 30 index gained 0.5% to 8846.00 while France’s CAC 40 index was down 0.3% to 4,243.72. Mike Snider contributed.
Debt Limit Fights Are All The Same — Except For This One
Maybe savvy investors know something the rest of us dont. Maybe they know, for instance, that past arguments over raising the debt ceiling have always ended short of disaster. History counsels complacency. Or does it? After all, history is not all about continuity it also involves a lot of change. And in fact, this debt limit debate is differentthan all the rest. Different because its a lot more dangerous. Traditionally, arguments over raising the debt limit have been a form of political theater, with lots of overheated rhetoric but no real chance of default. Of course, to the extent that the debt limit gives Congress any sort of leverage, in its fiscal battles with the executive, that leverage depends on the threat of default. But in the past, that threat has been largely implicit and always empty. Even historys most dramatic debt limit debate was largely a charade. In 1953 Congress refused President Eisenhowers request for an increase. Newspaper editorials chided Congress for playing games with the nations credit; then, as now, the president had elite opinion on his side. But except for the doomsayers in Treasury, few observers believed that default was a serious possibility. Raising the ceiling was a matter of prudence, not necessity. That was certainly the view of Sen. Harry F. Byrd of Virginia, the leading congressional opponent of raising the debt limit. Byrd knew that Eisenhower wanted a debt limit hike, but he was certain that the president could survive without it. Byrds confidence was quickly vindicated. Eisenhower responded to the debt limit defeat by slashing expenditures across the board, thereby giving Byrd exactly what he wanted in the first place. In addition, Treasury engaged in some of its famous fiscal gymnastics sources tell me (now called extraordinary measures but then lacking a hyperbolic label). When all was said and done, default didnt happen. And no one was surprised, least of all Harry Byrd. I think this action [the debt limit refusal] brought the administration to the realization that Congress is determined to have economy, he crowed in the wake of the budget cuts. It brought in the results, and there wont be any special session of Congress to raise the debt limit. Byrds victory would seem to vindicate the debt limit brinkmanship of todays GOP. But in fact, it points out the differences between then and now. In 1953 no one thought default was possible, not even the debt limit deniers. Today, even most Republicans acknowledge that default could really happen. Sure, some skeptics have questioned whether default is the inevitable sequela of an unraised debt limit. Ostensibly, some sort of payments prioritization could avoid actual default on federal debt instruments. Instead, we could just fold up most of the federal government semi-permanently. But in fact, the nations fiscal shortfall cant be permanently finessed with any sort of measures, be they ordinary, extraordinary, or even superhuman. Defaultwillhappen the only question is when. By and large, both parties agree on this reality, but they differ in their level of distress at the prospect. Democrats are suitably terrified, which serves their partisan agenda but also probably reflects their actual convictions. Many Republicans, on the other hand, seem less concerned. A sizable number of Republicans have publicly entertained the notion that default might not be a wholesale disaster. At least one has even suggested that it might be good for the country . To be sure, this is still a minority point of view. In particular, it doesnt seem to extend to the GOP leadership on Capitol Hill. But the willingness to consider fiscal triage in the wake of a debt ceiling breach is not confined to a few radical voices. Its become a common GOP talking point. And all this talk, even when confined to a minority of the minority, makes the risk of default much more serious today than its ever been before. Past debt limit debates have been conducted with a wink and a nod; everyone understood that necessary increases would not be refused. And Wall Street seems to think that the old rules still apply; that the Tea Party doesnt mean what it says; that GOP tough talk about the debt ceiling is just a bluff. I hope Wall Street is right. But if Tea Party lawmakers are bluffing, then theyre very good at it. And for what its worth, Harry Byrd would be horrified. Also on Forbes:
Stop kicking the debt ceiling can!
Since then, Treasury Secretary Jacob Lew has made accounting moves to continue financing the government without further borrowing. But Lew says those measures will be exhausted by Thursday, Oct. 17, 2013. The government will then have to pay its bills from its cash on hand o an estimated $30 billion o and tax revenue. (AP Photo/J. David Ake) ORG XMIT: NY120 (Photo: J. David Ake AP) Story Highlights Ratings agencies warn of U.S. credit downgrade Stocks, bonds could get hit hard Social Security, Medicare payments at risk SHARE 125 CONNECT 53 TWEET 28 COMMENTEMAILMORE As the deadline to default ticks down, you need to know how it will affect you, and how it will hit your portfolio. Hitting the debt limit isn’t, as some have cast it, “cutting up the nation’s credit cards.” The more apt analogy would be cutting up the credit card bill and refusing to pay for things you have already bought. The debt limit is a peculiar law that limits the amount the United States can pay for money that has been authorized by Congress — the same people who are railing against government spending. And the longer before the U.S. raises the limit, the more people it affects. STOCKS WEDNESDAY: How markets are doing Even without passing the limit, the nation’s borrowing costs are already rising. The U.S. issues Treasury securities in order to borrow: Treasury bills, notes and bonds are simply IOUs backed by America’s promise to repay. When a lender suspects you might not pay on time, it will demand a higher interest rate. That’s happening right now. For example, a three-month Treasury bill that matures Oct. 24 — seven days after the date the Treasury says the nation will be out of money — now yields about half a percentage point. While that may not seem like much, the rate on that issue at auction was 0.005%. Standard & Poor’s has already downgraded the nation’s credit rating during the last tussle over the debt limit, saying that political brinksmanship was incorporated into the nation’s less-than-perfect AA+ rating. On Tuesday, Fitch said it was considering lowering the nation’s credit rating as well. Should the U.S. actually default, S&P would lower its rating to “selective default,” since nations, unlike companies, typically don’t default on all their debts at once. Were the U.S. to actually default, you could expect other interest rates to rise, such as the rate on the 10-year Treasury note, because lenders would worry about being repaid. Rising rates would hit prices on bond mutual funds. Americans have $2.8 trillion invested in taxable bond funds, according to the Investment Company Institute, the mutual fund industry’s trade group. Bonds wouldn’t be the only victim. Rising rates means tougher competition for stocks from other investments, and would undermine investors’ faith in the economy. The value of the dollar would also fall on world markets, as investors sell dollar-denominated investments for other investments less likely to default. Rising rates would also rise for other borrowers, since many other rates, such as mortgage rates, key off Treasury rates. But Treasury borrowers aren’t the only ones affected by default. The debt limit applies to all government spending — Social Security payments, Veterans benefits, even military pay. The government shutdown alone shaves 0.3% a week from fourth-quarter GDP, according to John Chambers, chairman of the Sovereign Debt Committee at S&P, speaking on CBS This Morning. Shutting down payments altogether would be “worse than Lehman Brothers in my judgment, and I think it’s needless,” Chambers said. What’s an investor to do? As bad as the situation is — and it’s bad — you need to think carefully about selling your stocks and bonds. If you’re investing in a taxable account, you’ll trigger capital gains taxes. You may also owe commissions and fees on selling your holdings. You’ll also have to think about where you’ll put your money when you sell. If your sales go to a money market mutual fund, you need to be aware that a staple of money funds is Treasury bills.
La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks. The United States still has the skills to pay the bills. Whew. The debt ceiling has been raised … but only until February 7. So unless Republicans and Democrats suddenly grow up, the American people may have to brace for another dance with default sometime in 2014. Or will we? Is it remotely possible that Congress actually learned a lesson? I hope so. To quote Mary J. Blige, we need no more drama. And guess what? Maybe lawmakers will stop kicking the debt ceiling can down the road so we can avoid another scare like this one. Dr. Robert Shapiro, chairman of Sonecon, an economic advisory firm in Washington, is guardedly optimistic that we won’t go down the debt ceiling rabbit hole again. Shapiro, who served as Under Secretary of Commerce for Economic Affairs in President Clinton’s administration, said that it’s possible the government could enquiry shut down in January. But he thinks that lawmakers will not tie decisions about re-opening the government to raising the debt ceiling next time around. “I cannot imagine that anyone wants to go through this again,” he said. “The damage from an actual default would have been so enormous — on the scale of 2008 and 2009.” Related: China not impressed with debt deal Even though the stock and bond markets were relatively calm throughout October, Shapiro said that politicians have to realize that the rest of the world is growing tired with the tomfoolery in Washington. The U.S. won’t be able to remain the preeminent global economic powerhouse if our nation’s least and dimmest (I should trademark that) continue to act more like a banana republic — and I’m not referring to the clothing chain owned by the Gap (GPS) . “It’s remarkable to be in a position where we’re relieved that the United States did not default on its debt. This was always more about politics than economics,” he said. “The world has to be wondering if we’re going to be dealing with this issue every six months for the next 10 years.” Related: Washington is slowly killing the dollar Jerry Webman, chief economist with OppenheimerFunds, agrees. He said that Congress must recognize that it can’t risk missing payments to bondholders, Social Security recipients and others just to score partisan points. “It makes sense to take the discussion of the budget away from the debt ceiling. That would be good policy as long as Congress sticks with it,” he said. That doesn’t mean that Congress can’t have a reasonable conversation about taxes, entitlement spending and other big picture budget issues. They are incredibly important.
> And no matter which party you belong to, I think all Americans can agree that the U.S. needs to do something soon to address longer-term fiscal challenges. But that needs to be removed from the debt ceiling equation. “The debate needs to be about how much the government should spend, what it should spend it on and how it should raise the money to do that,” Webman said. “The debt ceiling is a historical artifact that should not be politicized.” Compromise may be a dirty word in Washington. But Congress and the president must pull an Avis and try harder to work together. Related: Shutdown took $24 billion bite out of economy Webman said that the most significant cause for concern is that lawmakers continue to do nothing. Extend and pretend nothing’s wrong. Delay and pray. (Not sure why I was suddenly possessed by New York Knicks legend and rhyming master Walt “Clyde” Frazier there.) “The biggest negative for investors and the economy is continued uncertainty. Businesses would rather have clarity about policies they may not like because you can at least deal with that,” he said. Exactly. There’s got to be a lot of stubbed toes on Capitol Hill from all that can kicking. So here’s hoping that Congress doesn’t repeat the mistake of the past few weeks. Reader Comment of the Week! Lot of tweets about the lunacy in DC this week. But this one was by far my favorite. BREAKING: GOP announces plan to end shutdown. Country will be organized into 12 Districts.