News / USA

    Economic Costs of Washington Dysfunction Weigh Heavily

    Economic Costs of Washington Dysfunction Weigh Heavilyi
    X
    September 26, 2013 11:39 PM
    The U.S. Senate is expected to work on an emergency funding bill this weekend to keep the government operating after its spending authority runs out October 1. The bill would still require approval from the Republican-led House of Representatives, which earlier this week agreed to fund the government only if none of the funds are used to implement President Barack Obama’s signature health care law. But even if lawmakers succeed in averting a costly shutdown, some say the U.S. economy already is paying the price for political dysfunction. Mil Arcega has more.
    The U.S. Senate is expected to work on an emergency funding bill this weekend to keep the government operating after its spending authority runs out October 1. The bill would still require approval from the Republican-led House of Representatives, which earlier this week agreed to fund the government only if none of the funds are used to implement President Barack Obama’s signature health care law. But even if lawmakers succeed in averting a costly shutdown, some say the U.S. economy already is paying the price for political dysfunction.

    It’s down to the wire again as Washington wrestles with another fiscal deadline. But even if lawmakers succeed in defusing the latest crisis, the uncertainty carries a hefty price tag.

    One study suggests that since the last budget impasse in 2011 - the market volatility, hiring delays and reduced consumer demand have shaved about $150 billion from the country’s gross domestic output.

    Testifying in Congress this week, economist Mark Zandi said that’s equivalent to more than one million jobs. “If political uncertainty had not risen to the degree that it has, the unemployment rate today would still be high, uncomfortably high, but at 6.6 percent [we’re currently at 7.3 percent, it would be 6.6 percent] that would make a meaningful difference to our economy’s performance.”

    Washington’s political dysfunction was evident this week when freshman Republican senator Ted Cruz railed for 21 hours against the health care law to delay a procedural vote. As part of his speech, he read excerpts from a children's book.  
     
    Fiscal reform advocate Robert Bixby said that’s not a winning formula for Republicans. "If their position is they would not increase the debt ceiling or indeed pass any appropriations bills unless Obamacare is repealed or defunded, that I think would be viewed by the public as an unreasonable demand and I think they would hold Republicans responsible.”

    Likely to be even more contentious is the coming debate on the debt ceiling. Failure to raise the debt limit will mean the U.S. government could run out of money to pay its debts by October 17 - the consequences of which Mark Zandi says “would be cataclysmic. It would mean higher mortgage rates, higher borrowing costs for businesses, lower stock prices, lower house prices, a full blown recession and there would be no reasonable policy response to it.”

    But another leading economist says those claims are greatly exaggerated. Alan Meltzer says the budget debates are necessary and more likely to lead to a compromise.

    “There will be consequences, but the consequences will depend upon how long the default goes on. It isn’t going to go on forever and it probably will arouse enough reaction from the public that will, if we don’t get the agreement before, we’ll get it after,” said Meltzer.

    The domestic wrangling is a big worry for U.S. trading partners. Many countries, especially those in emerging markets are dependent on American consumer demand for their exports. Another political stalemate could erode the world's confidence in the U.S. economy, which had been showing modest but steady signs of recovery.

    You May Like

    Saudi Arabia’s New Female Politicians in the Other Room 

    Many in Saudi Arabia say elected representatives should share unsegregated spaces; according to a recent survey, more than half the Saudi population, both men and women, prefer to work in a segregated place

    Russia Not ‘Apologetic’ for Syria Airstrikes

    With Moscow criticized for targeting armed opponents of President Assad, Russia’s UN envoy says his country ‘acting in a very transparent manner’

    Pakistan Warns of Islamic State's Growing Reach

    Aftab Sultan, General Director General of Intelligence Bureau (IB), briefed Senate Committee in closed hearing, saying that IS-linked groups have been expanding in Pakistan

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growthi
    X
    February 10, 2016 5:54 AM
    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Civil Rights Pioneer Remembers Struggle for Voting Rights

    February is Black History Month in the United States. The annual, month-long national observance pays tribute to important people and events that shaped the history of African Americans. VOA's Chris Simkins reports how one man fought against discrimination to help millions of blacks obtain the right to vote
    Video

    Video Jordanian Theater Group Stages Anti-Terrorism Message

    The lure of the self-styled “Islamic State” has many parents worried about their children who may be susceptible to the organization’s online propaganda. Dozens of Muslim communities in the Middle East are fighting back -- giving young adults alternatives to violence. One group in Jordan is using dramatic expression a send a family message. Mideast Broadcasting Network correspondent Haider Al Abdali shared this report with VOA. It’s narrated by Bronwyn Benito
    Video

    Video Migrant Crisis Fuels Debate Over Britain’s Future in EU

    The migrant crisis in Europe is fueling the debate in Britain ahead of a referendum on staying in the European Union that may be held this year. Prime Minister David Cameron warns that leaving the EU could lead to thousands more migrants arriving in the country. Meanwhile, tension is rising in Calais, France, where thousands of migrants are living in squalid camps. VOA's Henry Ridgwell reports.
    Video

    Video Valentine's Day Stinks for Lebanese Clowns

    This weekend, on Valentine's Day in Lebanon, love is not the only thing in the air. More than half a year after the country's trash crisis began, the stink of uncollected garbage remains on the streets. Step forward "Clown Me In," a group of clowns who use their skills for activism. Before the most romantic day of the year the clowns have released their unusual take on love in Lebanon -- in a bid to keep the pressure up and get the trash off the streets. John Owens reports from Beirut.
    Video

    Video Families Flee Aleppo for Kurdish Regions in Syria

    Not all who flee the fighting in Aleppo are trying to cross the border into Turkey. A VOA reporter caught up with several families heading for Kurdish-held areas of northern Syria.
    Video

    Video Rocky Year Ahead for Nigeria Amid Oil Price Crash

    The global fall in the price of oil has rattled the economies of many petroleum exporters, and Africa’s oil king Nigeria is no exception. As Chris Stein reports from Lagos, analysts are predicting a rough year ahead for the continent’s top producer of crude.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.