A prolonged US default could lead to the loss of 8.3 million jobs. This conclusion, after assessing the consequences for the country’s economy of exceeding the public debt ceiling, was taken at the White House.
As analysis by the Congressional Budget Office and the US Treasury Department shows, exceeding the national debt limit can have dire consequences for the US economy. For example, with a prolonged default, the number of jobs could be reduced immediately by 8.3 million. In this case, US GDP on an annualized basis could immediately collapse by 6.1% and unemployment increase by 5%.
According to US analysts, in the event of a default in the short term, the consequences for the US economy will not be so deplorable, but also very significant. For example, the number of jobs will be reduced by almost 500,000, GDP will decrease to 0.6% and unemployment will increase to 0.3%.
Note that the United States reached the public debt ceiling in January of this year. Its amount was 31.4 trillion dollars. A default in the country can occur as early as June 1.
Recall that earlier the head of the US Federal Reserve, Jerome Powell, said that the country could face a recession, but expressed hope for the soft nature of the fall of the US economy.
We may have what I hope will be a mild recession.
said Powell.
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