The President of the World Bank Jim Yong Kim warned the United States was nearing a ‘global economic disaster’ on Saturday. He urged the country’s policymakers to come up with a concrete plan of action and to resolve issues that led to a government shutdown last week.
On October 2nd, a number of U.S. government agencies and programs stopped functioning. The dispute between the Republican Party and the Obama-led Democrat Party over funding and implementation of the Affordable Care Act (Obamacare) eventually led to a shutdown that cost around $1.6 billion in the first week in lost economic output, according to IHS Inc.
"We're now five days away from a very dangerous moment. I urge U.S. policymakers to quickly come to a resolution before they reach the debt ceiling deadline...Inaction could result in interest rates rising, confidence falling and growth slowing," World Bank President said during a press briefing.
He added it could be equally disastrous for the developing nations in addition to hurting the developed economies of the world.
Christine Lagarde, the head of the International Monetary Fund (IMF) said if U.S. lawmakers didn’t come up with a resolution to end the government shutdown, it could cause “massive disruption the world over,” pulling the global economy into another recession.
Last week, Philippine President Benigno Aquino stated that what happens in the US effects the whole world. “The US economy is the number one economy in the world, what happens there affects all of us,” Aquino said.
Marian Wright Edelman, President of rights advocacy group Children’s Defense Fund, wrote in a blog that the U.S. Congressmen were causing an economic meltdown due to their stubbornness over the government shutdown, “A severe economic meltdown is predicted if Congress doesnot raise the debt ceiling in the next two weeks to pay the nation’s bills and obligations,” Edelman stated.
So far, only two senior senators Democrat Harry Reid and Republican Mitch McConnell have shown willingness of finding a congressional deal to reopen the US government.