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Monday marked the end of the second week that U.S. government has remained in a partial shutdown. Republicans and Democrats are continuing talks and are closer than ever before to reaching a resolution that would effectively reopen the government, but they are up against another deadline—they must raise the U.S. debt ceiling by Oct. 17 if we are to avoid our country defaulting on its debts.
According to CNN, a Senate meeting Sunday afternoon ended on a positive note — although no decision had been reached. Senate Majority Leader Harry Reid stated, “I've had a productive conversation with the Republican leader [Mitch McConnell] this afternoon. Our discussions were substantive and we'll continue those discussions. I'm optimistic about the prospects for a positive conclusion.”
However, while many plans and proposals were put forth this weekend, each and every one has been rejected. Democrats want a “clean” bill, one which would work only to raise the debt ceiling and reopen the government, while Republicans have rejected such measures.
The financial consequences of the government shutdown are already beginning to show, with the Dow Jones industrial average down 70 points shortly after stock markets opened this morning, The Washington Post reports.
If prolonged, the government shutdown will have more serious and lasting effects, particularly on the U.S. economy. Secretary of the Treasury Jack Lew said in a speech on Thursday that such a “manufactured political crisis” could potentially reduce GDP growth, and that if Congress allows the government to default (for the first time in US history), it would likely result in “credit market disruptions, a significant loss in the value of the dollar, markedly elevated U.S. interest rates, negative spillover effects to the global economy, and real risk of a financial crisis and recession that could echo the events of 2008 or worse.”