If US officials default on government debt payments, the US stock market will crash by 45%. In such a scenario, the volume of gross domestic product (GDP) will decrease by 6.1% and 8.3 million people will lose their jobs, informs Referring to the report of the White House Council of Economic Advisers, RIA Novosti.
A default of public debt could occur as early as June this year. This will happen if representatives of the Republican and Democratic parties cannot agree on the debt limit. The bar is currently set at $31.4 trillion, but the country’s total liabilities have so far reached $31.8 trillion.
“In case of default, GDP will fall by 6.1 percent, 8.3 million people will lose their jobs. <….> The default would also cause the US stock market to crash by 45%. This will lead to a deep recession comparable to 2008”.
27 May Pavel Samiev, Managing Director of BusinessDrom Analytical Agency declarationHe is of the opinion that the still unresolved disagreements between the representatives of the Republican and Democratic parties in the USA on raising the public debt ceiling may bring the onset of the financial crisis in the country closer. A compromise cannot be found, because such a solution only helps to delay the default, but does not help to avoid it.