FORTUNE -- The monthly jobs report released Friday was better than expected, but anyone who thinks this means the Federal Reserve will start slowing down its economic stimulus program is probably overlooking Washington's dysfunction.
Recall in October, Uncle Sam was forced to partially shut down its offices and services after Congress stalled on budget talks. This wasn't all that surprising to the Fed, which expected that lawmakers would have a hard time getting their act together before hitting critical budget deadlines. In September, policymakers surprised Wall Street when they delayed plans for tapering its $85-billion-a-month bond purchase program.
Once again, the Fed may have to prepare if there's another debt fight. The federal government may have reopened for business, but it's funded only through January 15. And the U.S. could hit the debt ceiling again in early February.
True, Washington's stalemate didn't seem to have a negative impact on jobs growth; even though thousands of federal employees were out of work for more than two weeks during the government shutdown, the economy added 204,000 jobs in October -- higher than the average job gain of about 180,000 in the first nine months of this year.
The Labor Department also revised up jobs gains from the summer months. And even though October's unemployment rate rose slightly to 7.3% from 7.2% because of the thousands of furloughed employees, those employees returned to work when the government reopened.
All this might suggest Washington won't destroy the economy after all, but that may be putting too much faith in Congress. A government shutdown is very different from a government default, which economists fear could cause the U.S. dollar to collapse and all kinds of other havoc. And while Congress avoided having to miss its debt payments during the last budget fight, it was still a very close call and there's no assurance a default won't happen if a debt fight ensues early next year.
This isn't to say the monthly jobs report is no longer relevant to the Fed -- policymakers watch it closely to figure out what's best for the economy. However, the Fed has shown that Washington stalemate has become a more immediate threat to the economy than anything the jobs report says. With so much uncertainty still plaguing Capitol Hill, it's hard to see how the central bank will blindly cheer October's employment picture.
It's time to wipe the entire slate clean in Washington politics and start over.
FORTUNE -- I guess we're all supposed to feel relieved, happy, and gratified that our alleged leaders in Washington have finally managed to approve reopening the government and keeping our country from defaulting on its debts.
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Laura Tyson, former advisor to President Obama, is "embarrassed" by the brinkmanship while Susan Schwab, who served under President George W. Bush, is less alarmist.
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It's still not clear that investors care what Fitch, Moody's and Standard & Poor's have to say about the quality of U.S. debt.
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FORTUNE -- The U.S. should expect further hits to its credit rating if Congress continues to carelessly dance on the edge of insolvency. The view that the U.S. might somehow escape this latest government meltdown without some sort of response from the credit rating agencies proved MOREOct 16, 2013 10:22 AM ET
IMF chief warns that a temporary debt deal will bring more economic angst.
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FORTUNE -- A short-term debt-ceiling fix now appears to be the most likely outcome of the prolonged political mud fight that has shut down the government for the last 15 days. But even if lawmakers do manage to pass an extension, it will do little to resolve the larger questions over U.S. economic leadership, International MOREOct 15, 2013 10:12 PM ET
Shriti Vadera, who was a top economic adviser to former British prime minister Gordon Brown, says no one has the "foggiest idea" how a default would unfold.
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FORTUNE -- Here's a bracingly frank view of our unfolding debt default crisis from across the pond: "It's one of the most shocking things I've ever seen."
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Markets may be calm as Congress struggles to raise the debt ceiling, but a U.S. default threatens the U.S. dollar's dominance in the world.
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