The White House, in full struggle with the Republican opposition over public debt, on Wednesday predicted economic disaster in the United States in the event of a prolonged default. Stock markets, for example, would fall 45% in the third quarter, while millions of jobs would be lost and the BIP would plummet 6%.
These advisers, gathered in the White House’s “Council of Economic Advisers”, assure that even in the event of a brief default, the US economy would suffer an increase in unemployment and a recession, of a lesser magnitude.
The US executive publishes this disaster scenario while Joe Biden tries to increase the pressure on the conservative camp for public debt.
duel between democrats and republicans
The 80-year-old Democrat says Republicans, who control one house of Congress, must quickly and unconditionally vote with Democrats to raise the maximum allowable limit on public debt.
He proposed a meeting on May 9 of the top leaders in Congress, representing the two major parties. The opposition asks, in exchange for this vote, a reduction in public spending.
This issue of raising the debt ceiling, a demand unique to the US, was long considered a parliamentary formality, but it began to escalate into a political confrontation when Barack Obama was president.
In fact, the federal government reached this famous ceiling, of $31 trillion, in mid-January, but until now it has managed this situation with accounting maneuvers.
However, the US Treasury has warned that, short of a vote in Congress, the government could be forced as of June 1 to make drastic cuts in certain social spending.
Before possibly falling into a completely unprecedented sovereign default situation that would see the United States unable to meet certain financial deadlines.
Source: BFM TV
