Back down, or shut down? America would probably have preferred the former. But Republicans and Democrats in Congress are so entrenched in their positions that it got the latter. When lawmakers failed to agree on a deal to fund the federal government by midnight on the last day of the fiscal year, it duly shut down on October 1st. Both parties then loudly blamed each other. The economic damage will at first be modest. Each week the government remains shuttered will knock an estimated 0.1-0.2% off the annualised fourth-quarter growth rate-nasty, but not a calamity.
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