Lots of us are hearing about US Shutdown in news on a daily basis
What’s exactly US Shutdown ? Is same situation can be occurred in other countries too?
Here I have tried to summarize few facts:
The US government has begun shutting its non-essential services.
laks of workers are waking up to the news that they are on unpaid
leave, and they don’t know how long it will last.
Why it happened:
Actually US Financial Year ended on 30th Sep and political community have failed to pass
the budget for 2013-14 FY.Without a budget deal approved by both parts of Congress, the House of Representative and the Senate,there’s no legal agreement to pay non-essential staff.
Why there was a rift:
Actually like in India we have Upper House and Lower House.
US have House of Representatives controlled by Republicans
and The Senate, which is under the control of Obama’s Democrats
Now Republican’s wants to cut in affordable health care act (Dream shown by Obama
to every american).
What will happen now:
Essential services, such as social security and Medicare payments, will continue.
The US military service will keep operating
Laks of employees from Non essential services, from Pentagon employees to rangers
in national parks, will be told to take an unpaid holiday.
What will impact on economy:
If people aren’t getting paid, they won’t spend as much in the shops. They may be unable to meet essential financial commitments, such as mortgages and credit card payments.
Analysts at IHS Global Insight have calculated that it will knock $300m a day off US economic output (total US nominal GDP, or output, was around $16 trillion last year).
The key issue is how long it lasts. Moody’s Analytics reckons that a two-week shutdown would cut 0.3% off US GDP, while a month-long outage would knock a whole 1.4% off growth.
When did this last happen:
It’s the first shutdown since 1995-1996,
That row ran for 28 days (over two stages).
Will this process happened in other countries too:
The shutdown situation is a product of the US democratic system.
Most of countries’s head have no power to reject finance bill, they can delay the process only.
Just think if it happens in India, will it be good….
As we have 80 Lacs Centre Govt employees and 2 Cr State govts..
Think about their 1 day Salary savings to govt.can be good contributor to reduce our CAD (current account deficit)
Your comments are Welcome!