Debt Deal Made To Avert Default Ending Government Shutdown

It looks like a debt deal has been made to postpone the effect of running out of free money and defaulting on the U.S. obligations. Here's my take on the so-called "deal."

Republican leaders conceded defeat in their two-week battle to derail Barack Obama's healthcare reforms on Wednesday, bringing the US back from the brink of a looming debt default and signalling the end of a two-week government shutdown.

With just hours to go until a deadline set by the US Treasury for extending the debt limit, House speaker John Boehner signalled he was ready to accept a Senate-drafted peace deal that contained almost no concessions to conservatives who had driven the country the precipice of a new financial crisis.

The standoff ended just after midday when Harry Reid, the majority leader, announced the deal on the the floor of the Senate. Calling for all sides to work together, he said: "Now is not the time for pointing the fingers of blame. Now is the time for reconciliation."

Mitch McConnell, the Republican minority leader, acknowledged the fight was over. "This has been a long, challenging few weeks," McConnell said. "This is far less than many of us had hoped for, but it is far better than some had sought."

The deal, crafted by Reid and McConnell, will fund the government until 15 January and lift the debt ceiling until 7 February. It will force both sides into a formal budget conference in an attempt to reach a longer-term deal by 13 December.

The only apparent change to the Affordable Care Act, which Republicans had targeted when they precipitated the government shutdown, involves asking the Obama administration to carry out better checks on the incomes of people registering for insurance exchanges.

A senior Republican aide told the Guardian that Boehner had agreed to allow the House to vote on the deal, which in practice means it would pass with support from Democrats and moderate Republicans. The vote was due to take place on Wednesday evening.

At 3pm, Boehner hosted a short meeting with Republicans in the House. Sources inside said he effectively told his colleagues they had lost the fight, before he was given a tepid applause.

Several congressman leaving the meeting conceded that hardline Republican tactics, which forced a two-week government shutdown and took the government to the brink of an economic crisis, had left them empty-handed.

John Williams: Very Serious Trouble in this Next Year - Weaker Dollar and Hyperinflation

John Williams of Shadowstats.com predicts, "You're going to have a dollar panic, but I can't give you the exact timing on that." Another potential problem is a credit downgrade of U.S. debt. Williams says, "If we get a downgrade here, that would accelerate the process of the dollar selling and moving us again into the early stages of hyperinflation." Williams says you can protect your wealth by holding hard assets. Williams goes on to say, "If your assets are denominated in dollars and Treasury bonds, those will become worthless in hyperinflation." Join Greg Hunter as he goes One-on-One with economist John Williams.

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