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American govt shutdown

edited October 2013 in Current Affairs
Anybody understands the whole thing? Why was there a shutdown? Impact over world economy, India in particular? Why the protests over govt shutdown? What exactly does it mean- the congress wont work??


  • Prelims : 2/5; Mains : 0/2; Interview : 0; Remainder : 1+1 (Tired but not; Retired) / Medical Science / Kolkata / Nihilist extraordinaire | Thanks a lot...
  • US shutdown:

    october 1=>financial year of US=budget presentation=>if not then US shutdown.

    Shutdown here means stopping the govt. services (means country is paralyzed).

    US => 2 parties : (1) Democrats (=obama) and (2) Republican (i.e. opposition).

    Like indian parliament, US congress made of 2 houses : (1) Senate(upper house)=>majority of Democrats and (2) House of representatives(Lower House)=> majority of Republicans.

    Main issue is : Healthcare bill aka obamacare.
    As obama wanted this bill to be passed but the opposition (i.e. republicans) think it is too costly n they won't let obama pass it.

    President presents budget in US congress(i.e. US parliament). After passing from lower house only, it can be passed into Senate. Being in majority in lower house, the republicans didn't let it pass through.

    Republicans didn't let this bill to be passed by 30th september midnight=> so that it can't be included in the budget n next day was the day to present budget.

    Importance of obamacare to obama =>He promised citizens insurance care at the time of elections and he thinks it will definitely enhance his image as a president.

    How it can affect india?
    Prolonged duration of shutdown can badly affect GDP of US.
    There are a lot of Indian companies that directly work for US govt. n hence their payment can be stalled.
  • edited October 2013

    To put in technical terms, America has something called Debt-Ceiling. It was introduced to bring in fiscal prudence.

    It was initially 85% of GDP of US but after the Fiscal cliff in 2011, Budget Mgmt Act of 2011 was passed and current debt limit was set at $16.699 trillion.

    This will get hit on Oct.17 this year, unless Congress does something to this effect.

    Well, the main issue here is Ideological clashes Not Obamacare as such, I have to say.Republicans want Tax breaks and cut in govt. healthcare spending and reduction in green energy programmes.

    Vote banks -
    Republicans - White Americans, Oil Co's, Jews and rich guys - they want Oil economy to go on - hence reduce green economy, tax breaks benefit rich more and want health care spending cuts which would hit Obamacare and SSN
    Democrats - Workers, Hispanics, Afro-Americans - they want cheaper student loans, health care - Obama does not want to give tax breaks and also not cut on Obamacare - Medicaid.

    Now, US Fed has extraordinary measures by which it can prolong the debt-ceiling but after a point, If govt. does not agree on voluntary cuts - automatic spending cuts will come in

    Spending cuts are in the ratio of their spending and given 22-25% if govt. spending goes to Social security, health care will take a huge hit. And also all the unnecessary services which are auxiliary are shut down like IT support for govt. agencies etc. which can hit IT outsourcing co's as well.

    I just told you the top of the pie, u can research further - try debt-ceiling, fiscal cliff and budget crisis, you will get a lot of FT, WSJ articles on it.
    Mankind was corrupt from the time of Adam & eve, why complain now :) || कांथर हुनु भन्दा मर्नु राम्रो || वीर भोग्या वसुंधरा
  • @thor what is FT and WSJ
  • @thor what is FT and WSJ
    Financial Times, Wall Street Journal
    Sharpen your axe, before cutting down the tree...
  • edited October 2013
    Note : The key info is in bold, rest is optional
    Guys these explanations on the situation are good but not complete...
    They have the same flaw that the news in main stream media has...
    Treating each issue like a coin(only 2 sides), when the reality is more like a dice(6 sides)
    There are more than democrats and republicans...
    Liberals for example have a different take on this, issue...
    If Obama care is implemented only way they will be able to sustain is through raising the taxes for the super rich and rich...
    Which scares the crap out of billionaires like Koch Brothers...
    and in response they are using the house members of the tea party (ones who hijacked the real republican party) to cause a logjam, which is diluting the efforts to launch of Obama care, which also falls on 1st Oct...
    Coincidence ???
    Can a handful of billionaires be powerful enough to halt the entire government just to escape higher tax rates...??? That too From the outside???
    They might not be able to do this in India but in US a nation that was built on capitalism, absolutely...
    One more reason to love India...
  • @All, these views including the indian express article were very helpful. Thankyou for explaining. :D
  • Ex-railwayman,Indian Police service
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