About two weeks ago, there was a shutdown in the United States. The centre of this storm was from the Act President Obama tried to pass. This Act aims to make healthcare affordable to all people in the United State; this is known as “Obamacare”. Currently, the US medical expenses are steep. In order cover the medical expenses, people need the insurance, but insurance in turn is also expensive. The government provides Medicaid for people people below a certain income and for those over 65 years of age. However, those who do no meet the conditions for Medicare or Medicaid often cannot afford to buy individual health insurance. As a result, Obamacare makes having health insurance mandatory while making it affordable for everyone by making changes to certain tax rules.
In order to pass any Acts, the US House of Representatives and the US Senate must agree upon a budget following fiscal. This year however, the politicians were no able to agree on the budgetã…¡without a budget, non-essential workers of the Government cannot be paid. The House of Representatives is largely controlled by Republicans and the US Senate is controlled by President Obama’s Democrats. And the Republican party, which was not pleased with the Act, continues its efforts to make changes to the Act.
This eventually led to the shutdown in US. It means the essential services such as social security payments and military services will continue to operate but employees of non-essential services will be asked to leave without payment. So how will this impact in the US economy? If employees are not paid, they will not have money to meet other obligations like rents and credit card payments, which will gradually cut US GDP off. Further, it will have some kind of impact to the world economy in terms of exports, but not much unless this draws into the long term. However, analysts do not believe that this incidence will go out into the long term.
References:
http://www.bbc.co.uk/news/world-us-canada-24343698
http://news.yahoo.com/govt-shutdown-enters-2nd-week-no-end-sight-074025328–politics.html