"We learned in 2011 that when you get close to the edge, it does do some damage. But we have a resilient economy. I am confident that our economy can recover"
- Jack Lew, U.S. Treasury Secretary
Former U.S. Fed Head Alan Greenspan believes that a recurrence of the crisis that brought the world's biggest economy close to the edge of default is possible. Mr. Greenspan claimed that he had not seen another situation in Washington where a compromise seemed to be so far away. He also expressed sympathies with the economic goals of the Tea Party, the faction that fought the government during debt limit talks. Meanwhile U.S. Treasury Secretary Jack Lew said that 16-day long partial shutdown of the federal government and default threat proved to be costly to the U.S. economy; however, the country is resilient enough in order to recover from tumultuous weeks. According to economists' estimation, the shutdown shaved a half a percentage point from the last quarter GDP growth. Treasury Secretary described events leading to the shutdown that damped business and consumer confidence, as a political crisis rather than an economic one. Lew blamed some House Republicans for the impasse that resulted in the government shutdown and default risk. He also underscored that the deep spending cuts, which are part of sequestration, are holding back the U.S. economy. The economic cost of the shutdown will keep the greenback under pressure this week, with the U.S. Dollar index falling to fresh multi-month lows, while the hit on business and consumer confidence could urge the Fed to postpone the withdrawal of stimulus until next year, according to analysts' expectations.
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