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Showing posts with label History. Show all posts
Showing posts with label History. Show all posts

Friday, 3 October 2025

US GOVERNMENT SHUTDOW

 

https://bbc.com/news/articles/crrj1znp0pyo

Anthony ZurcherNorth America correspondent and
James FitzGerald  
Watch: What could happen during the US government shutdown?

The US federal government has shut down after Republican and Democratic politicians failed to resolve a budget dispute.

It means that some, but not all, US government services are temporarily suspended, and 40% of the federal workforce – about 750,000 people – are expected to be put on unpaid leave.

Although budget confrontations are common in US politics, this spending fight is especially tense because President Donald Trump has drastically reduced the size of the national government since taking office, and has suggested he may use the current impasse to make further cuts.

Why has the US government shut down?

The shutdown happened because Republicans and Democrats could not agree to pass a bill funding government services into October and beyond.

Under the US system, the different branches of government have to reach an agreement on spending plans before they can become law.

The Republicans currently control both chambers of Congress. But in the Senate - or upper chamber - they are short of the 60 votes needed to pass the spending bill, which gives opposition Democrats some negotiating power.

They want to see an extension of expiring tax credits which make health insurance cheaper for millions of Americans, and for a reversal of Trump's cuts to Medicaid, a government healthcare programme used by millions of elderly, disabled and low-income people.

Democrats also oppose spending cuts to government health agencies.

A stopgap bill designed to avoid the shutdown was passed in the House, or lower chamber, but did not clear the Senate.

And so, at 00:01 EDT on Wednesday 1 October (04:01 GMT), it became official: the US had its first shutdown for nearly seven years.

Which government services will stop, and which will carry on?

Not all aspects of government will shut down - services deemed essential will continue as normal, although in many cases staff will not be paid for the duration of the shutdown.

Border protection and law enforcement staff, Immigration and Customs Enforcement (ICE) agents, in-hospital medical care and air-traffic control workers are expected to operate as usual.

Social security and Medicare cheques will still be sent out, although benefit verification and card issuance work may stop.

Government employees deemed non-essential will be temporarily put on unpaid leave. Contractors who work for federal agencies but are not directly employed by the government will miss out on work, too.

Services like the food assistance programme and federally-funded pre-school and institutions like the Smithsonian museums will likely be reduced or closed.

Several agencies, like the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) are also expected to furlough many workers, affecting ongoing research projects.

National parks and forests remained open during the last shutdown in 2018, but with few or no staff, which experts said led to a rise in vandalism, littering and looting of historical sites.

There could also be travel delays. The Airlines for America trade body warned that flight systems might "need to slow down, reducing efficiency". Passport agencies have also warned that it could take longer than usual to process travel documents.

Mail will still be delivered and post offices will remain open because the US Postal Service does not depend on Congress for funding.

Most American schools are state-funded, but the federal government is responsible for billions of dollars in grants and student loans, which could effectively come to a halt.

However, because the grants are typically awarded during the summer, they will be largely unaffected during this shutdown, according to the education secretary.

Members of Congress will also still be paid, a convention that has been criticised by some politicians.

How has the White House responded to the shutdown?

In the past, lengthy government shutdowns were usually seen as politically dangerous, hampering voters' everyday lives and the reputation of lawmakers and the president.

After previous shutdowns were resolved, government operations mostly returned to normal, with staff and spending levels largely going back to what they had been before.

However this time, the White House appears more than happy to shutter large parts of the US government for an extended period.

Over the past nine months the Trump administration has slashed government spending and sacked many federal workers, testing the boundaries of presidential power.

Officials have threatened to use the shutdown to identify more "non-essential" workers who could be permanently let go.

"We'll be laying off a lot of people," Trump said on Tuesday 30 September, the day before the shutdown began.

While both Democrats and Republicans are blaming each other for the current standoff, they did make last-ditch efforts to try to avoid it.

On Monday 29 September, Trump met all four congressional leaders - the top Democrats in the House and Senate as well as their Republican counterparts, but little progress was made, and both sides appeared to dig deeper into their positions.

How long will the current shutdown last?

It is difficult to say. In this case, it really depends when - or if - either of the parties will agree to a compromise.

The Republicans could negotiate an extension to the healthcare subsidies demanded by the Democrats.

Alternatively the shutdown could become so disruptive that the Democrats decide to back down and agree to fund the government - at least temporarily - to get things up and running again.

So far, the Trump administration has been been unwilling to offer substantive concessions. It believes the Democrats will bear the brunt of the public's blame because it argues the party's demands caused the shutdown.

Meanwhile the Democrats believe their efforts to secure cheaper healthcare are popular.

The party's congressional leaders provoked the ire of some left-wing activists for backing down during the last budget dispute in March.

Many Democrats seem to be itching for a bigger fight this time around – and funding the government is one of the only places where the party has some leverage.

How could the shutdown affect the economy?

The scale of the damage will depend in part on how long the shutdown lasts - and how wide ranging it is.

Analysts estimate it could shave roughly 0.1 to 0.2 percentage points off economic growth for each week that it continues - although much of that could be recouped, as has happened after previous shutdowns.

That relatively muted impact may be why the stock market seems to be shrugging off this latest threat.

But if Trump ends up firing workers, rather than temporarily putting them on furlough, the impact could be more substantial.

The US economy has already been hit by the effects of Trump's tariffs, with the likely delay of key data - such as the official US monthly jobs report - expected to add to the uncertainty.

What happened during the last US government shutdown?

Shutdowns over budgets are a unique aspect of US politics.

They have become quite common over the past 50 years - with three taking place during Trump's first presidential term.

The last shutdown in late 2018 lasted 35 days - the longest in history.

It was brought about by disagreements over funding a wall on the Mexico border. It finally ended in part because air traffic controllers, who had been working for a month without pay, started calling in sick en masse.

Flights were cancelled or delayed because of the lack of staff, and the shutdown came to an end shortly afterwards.

The Congressional Budget Office (CBO) estimated that the 2018-2019 shutdown reduced economic output by about $11bn, including $3bn that it never regained.

But shutdowns pre-date Trump.

The second longest to date was 21 days, under Democrat President Bill Clinton in 1995. His fellow Democrat Barack Obama had a 16-day shutdown during his time in the White House, and Republican Ronald Reagan oversaw eight shutdowns during his presidency in the 1980s - though all were relatively brief.


Friday, 5 September 2025

How US is eroding its own financial power with a crisis of trust in the dollar


Once hailed as the bedrock of global finance, the US dollar now teeters on the precipice of a crisis of trust. The era of "dollar exceptionalism," where the currency stood invincible, is rapidly crumbling under the weight of Washington's own missteps, which have continuously pushed the world to look for alternatives.

A careful examination of the dollar from the perspective of currency's four basic functions, namely world currency, stores of value, payment and circulation, reveals a startling reality.

From "dollar privilege" to "global enemy"

The US dollar is being pulled into a crisis of trust by its very own mastermind. Bert Flossbach, co-founder and chief investment officer of Germany's largest independent asset management firm, Flossbach von Storch, said: "The US government's chaotic tariff policy has undermined the dollar's safe haven status."

At the heart of the dollar's fall is America's weaponization of its financial system. Since the outbreak of the Ukraine crisis, Western countries froze $300 billion in Russian reserves and expelled Russia financial institutions from the SWIFT system. These drastic measures, intended to crush adversaries, instead triggered a mass exodus from the dollar.

Many countries have accelerated efforts to de-dollarize. Even Saudi Arabia, long the guardian of the oil-dollar nexus, has started accepting other currencies for oil transactions.

In one fell swoop, the very weapon the US used to maintain its financial dominance has turned into its Achilles' heel, splintering the global financial system and hastening the decline of the dollar.

From "safe assets" to "devaluation traps"

The US dollar's stability once rested on two pillars: a robust US economy and the nation's unwavering commitment to its credit. But today, both foundations are crumbling. The US national debt has soared past $36 trillion, with debt-to-GDP ratios hitting nearly 120 percent. The Federal Reserve's response has been to print more money, fueling inflation while simultaneously weakening the dollar.

The consequences are already evident. Countries that once trusted US debt now find themselves trapped in US dollar devaluation, even traditional allies like Japan and Saudi Arabia are offloading their stakes in American debt. Worse yet, the exportation of US inflation to emerging economies, through the "dollar tidal wave" has pushed countries like Argentina and Egypt to the brink of financial bankruptcy, igniting a worldwide movement away from dollar-based reserves.

In short, the American currency has become a ticking time bomb and a "devaluation trap" rather than a safe store of value.

From "everywhere" to "restricted"

The dollar's omnipresence in global trade is retreating. America's control over the SWIFT payment system, once a crucial artery for cross-border transactions, is not as reliable as it once was. Alternatives have emerged: China's CIPS system, Russia's SPFS and the EU's INSTEX are facilitating cross-border transactions without relying on US dollars.

The most significant blow, however, may come from the "petrodollar" system. For decades, oil trading has been anchored in US dollars, cementing its dominance. But countries like Iran, Venezuela, and even the UAE are shifting toward the acceptance of other currencies for oil transactions. This transformation could be the death knell for the dollar's privileged position in the global economy.

On top of this, the rise of central bank digital currencies (CBDCs) is set to further undermine the dollar's supremacy. As countries develop their own digital currencies and enter into cross-border alliances, the dollar's role as the global middleman in trade could be rendered obsolete sooner or later.

America's self-inflicted wounds

While Washington may feel emboldened by its ability to weaponize the financial system, the consequences will ultimately be self-destructive. For one thing, the erosion of trust in US debt will raise borrowing costs for the federal government, exacerbating the already crippling national debt. Secondly, the decline of the dollar as the world's reserve currency will shrink US income from "seigniorage," the revenue generated by printing money. 

For another, as the dollar's dominance erodes, America's geopolitical influence will fade. The loss of its financial leverage means that Washington's ability to impose sanctions or exert pressure on nations will diminish, weakening its role as the global leader.

The message is clear: The world no longer wants a single currency, particularly one that is the symbol of hegemony and is increasingly wielded as a tool of coercion.

The future belongs to a more diversified monetary system: where multiple currencies, including the euro, Chinese yuan, and potentially even gold or digital currencies, will all play a larger role. This shift may be uncomfortable for America, but it is in line with the trend of history.

The dollar's downfall should be a wake-up call for the US. If Washington continues down its current path, it risks turning itself into an isolated financial island, cut off from the very system it once cultivated and ruled.

The time has come for America to take a more collaborative, less confrontational approach, or risk witnessing its global influence slip away.

The author is a commentator on international affairs, writing regularly for Xinhua News, Global Times, China Daily, CGTN etc. opinion@globaltimes.com.cn 

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Anwar: Victory Parade a reminder to defend one’s sovereignty, joins world leaders at China’s Victory Day parade marking 80 years since WWII

 

Standing united: Xi and his wife Peng Liyuan (centre) posing for a group photo with the heads of foreign delegations and their spouses before the commemorative parade marking 80 years since the end of World War II in Beijing. Anwar (front row, fourth from left) and his wife Datuk Seri Dr Wan Azizah Wan Ismail are in attendance. — Xinhua

BEIJING: The commemorative Victory Parade held by China to mark 80 years since the end of World War II serves as a timely reminder that a nation’s sovereignty must always be defended and safeguarded.

Prime Minister Datuk Seri Anwar Ibrahim said this is even more crucial in today’s geopolitical landscape, where turmoil persists and the international system is increasingly undermined.

He cited the genocide in Gaza, where the Israeli regime continues its atrocities against Palestinians with impunity.

“For me, the celebration is a reminder that a nation must be free, independent and sovereign. A country’s independence must be respected.

“Our experience of embracing peace and resolution after World War II, and how China rose against violence and colonialism, should serve as a lesson for today’s society, especially in our region,” he told Malaysian media at the end of his working visit to Beijing and Tianjin this week.

Anwar was among the foreign leaders invited by Chinese President Xi Jinping to attend the parade at Tiananmen Square yesterday morning.

On his participation in the Shanghai Cooperation Organisation (SCO) Plus Summit 2025 in the port city of Tianjin, Anwar said that although Malaysia is not a member of the SCO, he was invited by Xi, as the current Asean Chair, to attend as a special guest and share his views on global issues.

“So we took the opportunity to attend and share our views,” he said, Bernama reported.

Anwar said he also highlighted the United Nations’ failure to fulfil its mandate in resolving major crises, which has further eroded its global influence – a point acknowledged by UN Secretary-General Antonio Guterres, who participated in the meeting.

The Prime Minister added that he had met several world leaders on the sidelines of the summit.

Among them was Myanmar’s acting President Min Aung Hlaing, with whom he discussed and followed up on the country’s peace process ahead of Foreign Minister Datuk Seri Mohamad Hasan’s visit later this month.

His meetings with Turkish President Recep Tayyip Erdogan and Egyptian Prime Minister Mostafa Madbouly, meanwhile, focused on the situation in Gaza amid Israel’s brutal aggression.

“I asked about the latest developments in Gaza. Many leaders who attended the summit also raised the issue of the ongoing atrocities in Gaza and the suffering of the Palestinian people there,” Anwar said.

He also met with his counterpart from Pakistan, Shehbaz Sharif, Cambodia’s Hun Manet and Nepal’s Prime Minister KP Sharma Oli to discuss boosting two-way trade and investment. 

Anwar departed for home yesterday afternoon after attending the Victory Parade and a banquet hosted by the Chinese President.

China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


Many 'firsts' in impressive formations displayed in China's massive V-Day parade

China held a massive military parade in central Beijing on Wednesday to mark the 80th anniversary of its victory in World War II, pledging the country's commitment to peaceful development in a world still fraught with turbulence and uncertainties


Anwar joins world leaders at China’s Victory Day parade marking 80 years since WWII
Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic
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China's V-Day gathering to start at 9 a.m., Sept. 3 at Tian'anmen Square


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Prime Minister Datuk Seri Anwar Ibrahim had a bilateral meeting with Chinese Premier Li Qiang at the Diaoyutai State Guesthouse yesterday. — Bernama pic



 banquet hosted by the Chinese President.