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If the United States Congress does not pass a continuing resolution through September 30, 2011 (the end of Fiscal Year 2011 which began on October 1, 2010), the government will shut down because no appropriations will have been made for the various government agencies to function. The cause of the issue is the budget debate. A similar shut down had occurred in 1996 during the presidency of Bill Clinton.
Relevance to the People
All government expenditures or outlays by the United States Treasury will cease to occur, including payments of salaries to government workers and contractors.
Is the shutdown necessary if no agreement is reached on government spending and reform?
Then, can the government continue to remain open?
(a) The Federal Reserve takes over funding the government deficit at FY 2010 appropriations beginning March 01 as approved by the Congress; (b) The Congress and WH will continue to negotiate through the remainder of this FY, through September 30th, the course of government reform; (c) US debt ceiling and new debt issuances by the Treasury will be frozen until the negotiations are complete and most likely for the foreseeable future, legislating the FY2012 nominal budget as the budget constraint for the next decade, subject to revisions once a decade; (d) The Fed will make industrial policy for the US through US debt buybacks and Term Asset-Backed Lending Facility (TALF) over the next decade and the Congress will overhaul taxation to a consumption tax structure to be mutually consistent; (e) Obamacare will be revised as a part of government reform of consolidation and streamlining to a government health safety net only and to encourage the expansion of private health care supply; (f) Financial regulatory reform will be revisited.
What must the government communicate to the public?
If the government must shut down, the WH, the Congress and the Fed must issue a joint statement before the shut down that, as the United States deliberates government reform through 09/30/2011, the Fed will standby to calm the global markets as US debt issuances are frozen for the foreseeable future.