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How Shutdown End and Raised Debt Ceiling Affect the Economy

SPRINGFIELD, Mo. -- The government shutdown ends as soon as President Obama signs the bill passed by congress Wednesday night.
SPRINGFIELD, Mo. -- The government shutdown ends as soon as President Obama signs the bill passed by congress Wednesday night.

There are two issues wrapped up in the vote: ending the government shutdown and raising the nation's borrowing limit, the debt ceiling.

The U.S. stock market closed Wednesday on a high note, with confidence that congress would end the government shutdown and vote to raise the debt ceiling.

But even though a deal was reached, it's still only pushing back the deadline to January.

"It means that we could be right back in this same situation in just a few months," Director of the Bureau of Economic Research at MSU David Mitchell said.

Mitchell said this is a recurring issue because of partisan politics.

"We have two completely different sides of the government wanting to do different things. Both of them are determined to get their way," he said.

"While I support ending the shutdown, I cannot support this legislation," Representative Jason Smith (R-MO) said.

Smith voted against raising the debt ceiling to end what he calls our nation's spending addiction.

"Only in Washington would the solution to a 16.7 trillion dollar national debt be an increase in our borrowing limit," he said.

But if the U.S. cannot pay its bills, Mitchell said the negative effects would be far-reaching.

"You're looking at higher interest rates, you're looking at pushing the U.S. possibly back into a recession," he said.

He believes even though default was avoided this week, reaching this fiscal cliff every few months will take its toll.

"Getting this done at the very last minute rarely makes good policy and it doesn't put a lot of faith in markets, it doesn't increase the faith that markets have in the U.S. government," he said.

He believes the issue will not go away until it gets separated from party politics, like the Affordable Care Act and domestic spending.

"Tacking all that on to matters of the debt ceiling is very short sighted," Mitchell said.

All of the senators from Missouri and Arkansas voted for the compromise bill early Wednesday.

Missouri reps Billy Long, Vicky Hartzler, and Jason Smith all voted against the bill.

Arkansas' Steve Womack voted yes and so did Rick Crawford.
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