Budget fight: Round 2

The possibility of a Federal government shutdown is back on the front pages, with concern growing that no agreement will be reached before the current continuing spending resolution expires this weekend. Once again, both sides appear to be spoiling for some kind of fight and there is a rising danger that this brinkmanship will go too far. Depending on how long it lasted, a government shutdown could knock 1% or more off annualised GDP growth, while a failure to raise the debt ceiling could theoretically lead to a debt default.