U.S. Shutdown Threatens Global Economy

Congress’s inability to govern and its Republican shutdown are having deleterious effects far beyond the borders or the United States.

Mario Draghi, the president of the European Central Bank, said: “It is unthinkable that an agreement won’t be found. If this situation were to last a long time this would be negative, very negative for the US economy and the world economy and could certainly harm the recovery.”

Financial markets rallied strongly at the end of last week as hopes were raised that a deal might be achieved by the weekend. But after talks broke down on Saturday, there were concerns that dealers would take fright at the show of brinkmanship taking place in Washington.

Tharman Shanmugaratnam, Singapore’s finance minister and chairman of the IMF’s key policymaking committee, said: “It’s a clear negative when you think about the key element of the recovery – private sector investment – that has to take place over the next one to two years.

Jim Yong Kim, president of the World Bank, said: “We are now five days away from a very dangerous moment. I urge US policymakers to quickly come to a resolution before they reach the debt ceiling deadline. The closer we get to the deadline, the greater the impact will be for the developing world. Inaction could result in interest rates rising, confidence falling, and growth slowing.

By: Alan

Alan Colmes is the publisher of Liberaland.