US Treasury Secretary Jack Lew says the recent fiscal fight between Republicans and Democrats which resulted in a 16-day federal government shutdown has had a bruising impact on his country’s economy.
“Unfortunately, we learned in 2011 that when you get close to the edge, it does do some damage,” Lew said. while appearing a NBC News’ “Meet the Press”.
“This one was a little bit scary because it got so close to the edge.”
He added that the partial shutdown eroded the confidence of both businesses and consumers.
The Treasury Secretary said that the government closure increased borrowing costs in the short term, adding it also caused a certain loss of economic activity. He did not provide any precise data.
An analysis by the leading rating agency Standard & Poor’s, however, said the shutdown cost the US economy at least $24 billion.
Elsewhere in the interview, Lew acknowledged that the shutdown happened because the two dominant political parties in the country failed to resolve their political differences.
“It’s important to remember that what we just went through was a political crisis, not an economic crisis,” he said, adding that “We need to make sure that government does not go through another round of brinkmanship. This can never happen again.”
A deal between Democrats and Republicans in Congress on Wednesday night restored government funding through January 15. The last-minute deal also prevented an unprecedented debt default by extending US borrowing authority through February 7.
Many in the US are still worried as they expect another political standoff between Republicans and Democrats after the short term deal.
DT/DT
Source: Press TV