Back from the brink
- SC stays Teesta Setalvad's arrest till Friday
- Arvind Kejriwal meets PM Modi, raises issue of statehood
- We moved from politics of agitation to politics of hope, says Yogendra Yadav
- After Modi's rap, BJP workers shelve NaMo temple project in Rajkot
- Nitish parades his numbers, Bihar Governor calls Manjhi for floor test
In the US, the debt ceiling agreement averts a crisis and postpones the problem
With the US Senate passing the debt ceiling bill, the government will be able to borrow and function till January 2014. Few people believed that the US government would actually default — a delay in payment is technically a default — but even the tiny probability that it would do so was scary. A few days of delay in interest payments would have been enough to cause huge volatility in bond prices. The large number of central banks, such as those in China, India and Japan, which hold the supposedly risk-free bonds of the US government, might have started adjusting their portfolios to exit such bonds.
The main issue of contention was the Obamacare health plan, which is being strongly opposed by some Republicans. That issue has not been resolved. The general sense in the US and in financial markets was that an agreement would be reached before the last day, at the eleventh hour, and that the shutdown was disruptive and unnecessary, leading to difficulties for thousands of employees and loss of income for businesses.