Excerpt
SUMMARY: President Barack Obama called leaders of the House and Senate to the White House to discuss the stalemate keeping the government shutdown. House GOP members forged ahead with various bills to re-open parts of the government, but Democrats dismissed that approach. Congressional correspondent Kwame Holman reports.
"How long before shutdown has major impact on the economy, private sector?" PBS Newshour 10/2/2013
Excerpt
SUMMARY: After day two of the government shutdown, some industries, like tourism, have already taken a hit. How might the effects spill over into other sectors of the economy and the markets? Judy Woodruff looks to Diane Swonk of Mesirow Financial and Mark Zandi of Moody's Analytics for analysis and predictions.
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DIANE SWONK, Mesirow Financial Holdings, Inc.: (on shutdown) And, yes, we also see these workers, census workers are all across the country; 85 percent of federal workers workout side of Washington, D.C., so as bad as it is in Washington, these are workers that vote all across the country, which, believe me it's having an impact, like I mentioned, the 4,000 workers in Kentucky. We have got workers here in Illinois that clearly aren't working at this stage of the game. The roads are not as clogged and all the retailers that get the fallout.
But also the auto industry is very concerned. I have gotten several calls from Detroit already, concerned about the uncertainty created by this, people not knowing what this means. And as the events continue to fall out as we approach the debt ceiling as well, that can really rock financial markets and that causes hesitation. Hesitation in an economy that's already weak is our greatest enemy.
When consumers are uncertain, they don't buy big-ticket items or luxury items. They don't spend on that extra meal out or going out to the movies. On the flip side of it, we also see more importantly businesses not willing to pull the trigger and hire, which is something that Mark was talking about. We have already seen the largest hiring in the sort of leisure and hospitality industries, but you are not going to see much of that at all. That pullback right as we enter into the holiday season I think is really critical.
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MARK ZANDI, Moody's Analytics: Well, it's everybody then, because if we hit the debt limit, what that means is that the Treasury can only pay the bills for which it has enough cash. So it won't have enough cash to pay all the bills and there are a lot of bills.
Now, they're going to make their payments to the debt holders, the people who own the Treasury bonds. But that's going to leave less for everyone else. And so that means Medicare-Medicaid recipients, if they -- if we don't settle this by November 1, it means Social Security recipients won't get their check on time.
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