Three days until the doomsday

With only couple of days left before the October 17, the world's largest economy is moving perilously closer to its first-ever default, while the partial government shutdown entered its 14th day as leading political parties still struggle to reach a consensus. Amid raising concerns over a possible default more and more analysts all over the world are making bets whether the economy will be able to live through this crisis. From the international perspective the latest shutdown seems a comparatively small economic issue by global standards. In contrast, the United States default would dwarf elsewhere in the world, while a combination of debt crisis and budget blockage will make matters even worse. Last week the head of the International Monetary Fund, Christine Lagarde, warned a default could tip the whole world into recession. Moreover, the President of the World Bank, Jim Yong Kim, backed Lagarde's comments, saying the U.S. should reach a deal before Thursday's deadline. 

According to latest projections, each week the government is shut down, 0.25% is cut off economic growth, which is already projected to be sluggish in the final quarter. Meanwhile, U.S. Treasury should refinance $100 billion worth of debt each week and it also has to pay interest on its huge debt burden. A possible inability to pay that interest or pay back the debt if necessary would have a disastrous effect on the global economy.