A prolonged default in the US could result in a 6.1% decline in the country’s GDP and the loss of 8.3 million jobs. It has been reported TASS With reference to the analytical material of the Council of Economic Advisers at the White House.
According to experts, exceeding the US national debt ceiling could cause serious damage to the US economy. If the federal government does not meet its obligations, the economy will quickly turn around, with the severity of losses depending on the duration of the default. And if the default continues, it is likely to cause serious damage to the economy. With such a long default, business growth now at a high pace will be replaced by multimillion-dollar losses.
The document concludes that the possible consequences of a prolonged default in the third quarter of 2023 include a 5% increase in unemployment and a collapse in the economy, in addition to a 6.1% fall in GDP and a loss of 8.3 million jobs. If events develop this way, the serious negative consequences for the American economy could continue into early 2024 or even longer.
Experts say that if the default is short-term, then the US GDP may fall by 0.6% and the number of jobs will decrease by 0.5 million, in which case unemployment in the country will increase by 0.3%.
Analysts also consider the possibility that disagreements between the US administration and Republicans in Congress over raising the national debt ceiling will not lead to a default, but instead lead to a 0.3% drop in GDP and a reduction in jobs. 200,000 and a 0.1% increase in unemployment.
Former US President Joe Biden not going Consult with representatives of the US Congress about a possible default in the country. The crisis could come as early as June 1, according to the US Treasury Department.