US SHUT DOWN?

BY:-
Kuldeep Singh
Sandeep Sahoo
The debt ceiling is a borrowing limit, similar to the spending
cap on a credit card.
It places a lid on how much the United States can borrow by
selling Treasury bonds.
DEBT CEILING?
HISTORY
After the US government went into a shutdown on 1
st
October , and the only
essential services functioned for two weeks , the US Congress voted on the
night of 16
th
October , to avert a debt default and allow the government to
work again.
Shutdown lowdown
First government shut down Since 1995-96 under President Clinton
EFFECTS OF DEFAULT
Employment
Stock market
Research and Education
Global Effect
Impact on India
DIRECT EFFECTS
Jobs
800,000federal employees were furloughed as a result of shutdown
Over
1 MILLION more were on delayed pay.
The furloughed employees were initially on unpaid leave , but Congress passed a bill to
provide them back pay .The Defense Department deemed its employee essential ,
bringing them all back to work
DIRECT EFFECTS
Stock Market
The government shutdown has also been closely tied to
the financial markets , with fluctuations across the board
Through stocks fell over the first week , they
Rose again with talks of resolutions of the debt-ceiling
debate in the end of the second week of the shutdown.
Investors are watching budget talks closely . Many
investors will avoid the risk of holding securities during a
default . These fears of what could happen often causes
people to pull out of the market.
DIRECT EFFECTS
Stock markets responded positively the day after the deal was struck.
The NASDAQ composite
index roe 24 points to 3,863
17
th
October
DIRECT EFFECTS
Research and Education
The shutdown woes have also hit research institutions that depend on federal
funding and grants to continue their work .
Some of those affected
GLOBAL EFFECT
Almost half of US debt owed to foreign powers , including
CHINA
$1.3 TRILLION
JAPAN
$1.1 TRILLION
President Obama has missed the Asia Pacific
Economic Cooperation (APEC) summit to deal
with the government issue at home.
IMPACT ON INDIA
New Visa issuance
Rupee Depreciation
Sensex could be volatile
Ireland
Dubai
OTHER COUNTRIES DEFAULTED ON DEBT