What happens if the US government shuts down?

The US Government has reached its 'debt ceiling' - the self-imposed limit on the amount it can borrow. And unless politicians agree to raise that limit by midnight, there will be a ‘federal government shutdown’ as the government runs out of cash. James McKeigue reports.

Until now, the US government has avoided the austerity measures being driven through by indebted governments in Europe and the UK. Instead, it has focused on spending its way out of trouble.

Yet if Republicans and Democrats can't come to some sort of agreement by midnight tonight (EST) austerity might be forced upon them. The US Government has reached its debt ceiling, a self-imposed limit on the amount it can borrow. Unless politicians agree to raise the limit ie agree to borrow more money there will be a federal government shutdown' as the government runs out of cash.

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.