The U.S. federal government shutdown has lasted for 33 days, just one step away from the 35-day 'longest shutdown record' set during the Trump era.
Looking at the Federal Reserve's massive money printing over the past few years, many people are puzzled: Since the U.S. can print money, how did it end up in a government shutdown situation? Is it really out of money?
First, clarify a key understanding: a government shutdown ≠ the U.S. has no money, but rather that Congress hasn't passed a new budget bill.
According to the U.S. Constitution, every expenditure of the federal government must be authorized by Congress — even if the treasury has money, as long as Congress hasn't signed off on the budget, the government can only be 'legally out of money.' It's like having a balance in the family bank account, but if the parent who has signing authority doesn't agree, you can't withdraw the money even if you urgently need it.
The direct trigger for the current shutdown is the deadlock in budget negotiations between the two parties: the Republican Party insists on cutting expenditures in areas such as welfare, environmental protection, and immigration, claiming these projects 'waste financial resources.'
The Democratic Party is determined to preserve investments in these areas, believing it relates to people's livelihoods and social stability. Both sides are unwilling to compromise, and the budget bill has yet to pass, leaving the federal government with no choice but to 'shut down.'
Looking back at history, government shutdowns in the U.S. are not new, but the costs have always been significant. During the longest shutdown of 35 days from 2018 to 2019, 800,000 federal employees were forced to work without pay or take leave, public services like airport security checks and social welfare distribution were stalled, ultimately leading to over $11 billion in direct losses for the U.S. economy, hindering business operations and disrupting the lives of ordinary citizens, with the entire society paying the price for the political games between the two parties.
Behind this shutdown is a more dangerous 'hidden danger' than political arguments — the U.S. debt crisis.
As of now, the scale of U.S. federal government debt has surpassed $41 trillion, leaving only $4 trillion of space before the industry warning of the 'credit collapse critical point' at $45 trillion.
If borrowing more money to avoid a shutdown only further overdraws the nation's credit, once a trust crisis in U.S. debt is triggered in the market, the consequences could be a hundred times worse than a government shutdown.
For this reason, the U.S. is willing to bear the costs of a government shutdown and delayed economic data (which even affects the Federal Reserve's interest rate cut decisions) rather than easily expanding the scale of borrowing.
The impact of this shutdown has long exceeded U.S. borders, posing risks to global markets, especially the cryptocurrency market: on one hand, the Federal Reserve may delay or adjust the pace of interest rate cuts due to incomplete economic data, while U.S. stocks are still at historical highs. Once the support of interest rate cut expectations is lost, a correction is likely to occur;
On the other hand, for the cryptocurrency market, November is a crucial cyclical node. If a correction in U.S. stocks triggers market panic, combined with increased uncertainty in Federal Reserve policy, this round of the cryptocurrency cycle may end prematurely.
It is important to know that the bull-bear transitions in the cryptocurrency market over the past few years have heavily relied on the Federal Reserve's interest rate hike and cut cycles. Now, this 'four-year pattern' is being disrupted by the U.S. debt crisis and the government shutdown.
Ultimately, the U.S. government shutdown is merely a superficial political farce, revealing a deeper crisis of the U.S. debt nearing the critical point and an unsustainable fiscal system.
The current shutdown may just be the beginning; greater risks lie ahead.
