Congress's resolution of the government shutdown and debt limit crisis has some upbeat implications, but the fiscal stare-down also did some lasting damage to the US economy.
A 16-day federal government shutdown ended early Thursday morning, signaling an end to a bitter and high-stakes fiscal fight that threatened to mire the US economy in slower growth – or worse – just ahead of the year's busiest retail season.
The resolution has some upbeat implications for ordinary Americans: revived consumer spending as furloughs end for workers; a return of many basic federal services – including the National Zoo’s beloved “panda cam” video feed; and an overall confidence boost as worry fades about a looming Treasury default.
All that helped push the Standard & Poor’s 500 stock index to a record high by midday Thursday.
But the shutdown and the threat of a debt-limit crisis also did some lasting damage. Economic growth in the fourth quarter is poised to be lower than it would have been. The shutdown may end up costing taxpayers money instead of saving them anything. And America’s reputation as a credit-worthy borrower has suffered at least a modest ding.
On a more personal level, many tourists with immovable travel schedules missed hoped-for visits to places such as national parks or the National Gallery of Art.
“The government shutdown and flirtation with default have dealt a severe and entirely avoidable blow to America’s reputation around the world while harming economic growth and job creation,” Business Roundtable president John Engler said in a statement released as Congress was voting Wednesday to end the shutdown.
The fiscal stalemate that had gripped the nation’s capital was bookended by a partial government shutdown that began Oct. 1 and by a last-minute legislative fix on Oct. 17, as a deadline arrived to raise the ceiling on federal debt.
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