If the US public debt limit is exceeded, the country may go into recession due to increasing economic costs and the unemployment rate will increase at least 2.5 times. In this respect writer New Dawn.
In the US, the federal government is about to run out of cash once the $31.4 trillion national debt limit is reached, while there is still no agreement in negotiations on the border. Moreover, the current situation may threaten the country with a prolonged recession with a sharp increase in unemployment.
The publication stated that non-payment of the debt will lead to the collapse of GDP in just one week and the number of unemployed to rise by 2 million. All this will lead to higher interest costs. Therefore, the US economy could only lose about 10 trillion dollars at the beginning of the crisis.
Market experts think that the current situation in the country’s economy may lead to a vicious circle in which rising unemployment will lead to a decrease in consumer spending and an increase in the number of layoffs.
May 28 Bloomberg reportedthat recently the fiscal policy of the US authorities (strategy in the field of public expenditures and taxes) has seriously lost track on the background of the postponement of negotiations on the future fate of public debt. Despite relatively low unemployment rates and a gradual recovery in business activity, government spending continues to exceed income levels.