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White House Office of Management and Budget chief Shalanda Yang said declaring a default in the United States would play into the hands of China and Russia, writes the Washington Post.
“Countries like China and Russia will benefit from the ‘chaos’ that would result if the United States failed to repay its debt,” she said.
According to the official, Russia and China will be able to provide this as proof of the ineffectiveness of democracy. Exceeding the US government’s debt limit could lead to default, according to analysis by the Congressional Budget Office and the Treasury Department.
A short-term default will not lead to serious consequences, while a prolonged default could lead to the loss of 8 million jobs, a drop in GDP of 6% and a stock market drop of 45%. If a default occurs, its consequences will undo any results of the work of President Joe Biden’s administration.
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