Conference Presentation, Fireside Chat, Panel
Is the US Gathering Steam: Remarks on the Government Shutdown
- The U.S. government shutdown is projected to last at least two weeks, with potential credit rating damage anticipated if the Treasury cannot cover bills around the 16th or 17th of the month.
- Political negotiations may result in a deal to open the government and raise the debt ceiling within the current week, though the Tea Party faction is expected to resist on Affordable Care Act issues, potentially forcing Paul Ryan to address 40 to 50 caucus members within one week to prevent a breach.
- Successful negotiations could lead to a healthcare coverage restoration deal one to two weeks after the immediate crisis is resolved, while international diplomatic progress with Iran may position Vladimir Putin as a legitimate Nobel Peace Prize candidate within 12 weeks.
- The broader political environment is expected to be highly volatile over the next two weeks, characterized by uncertainty that delays fundamental decisions on the transportation bill, R&D tax credits, and energy efficiency legislation.
- Economic indicators suggest the current recovery is illusory, with growth expected to be very slow and flat for the year following 8 to 9 percent growth in the previous two years due to a slowdown in China and a recession in Europe.
- Asset markets are described as containing housing, stock, and bond bubbles, creating an unsustainable monetary approach where the Federal Reserve faces a difficult exit strategy due to an already flooded money supply.
- U.S. exports are projected to fall well below the previous year's six billion threshold as hundreds of billions of dollars in projects remain delayed on the drawing board for months or years due to a lack of budget certainty.