In a sobering analysis released by White House economists, a catastrophic outcome of over 8 million job losses has been projected should the United States default on its debt. The dire warning, backed by Moody’s comprehensive assessment of various macroeconomic models, paints a grim picture of the potential ramifications of breaching the nation’s borrowing limit.
The analysis lays out a chilling scenario in which nearly 8 million jobs within the US could vanish if a default occurs. However, offering a glimmer of hope, analysts foresee a possibility of adding 900,000 jobs in the coming quarters if a clean debt ceiling increase is implemented.
Jointly prepared by the Congressional Budget Office and the U.S. Department of the Treasury, the White House analysis report highlights an alarming reality: the US is rapidly approaching a critical juncture where it will be unable to meet its financial obligations. Dubbed the “X-date,” this impending threshold carries profound implications for the nation’s economy.
The report emphasizes that breaching the debt ceiling could disrupt the financial landscape, adversely impacting businesses and households. Furthermore, it unequivocally states that an actual breach in this delicate situation would severely damage the US economy.
Highlighting the precariousness of the situation, the report underscores, “Analysis by CEA and outside researchers illustrates that if the U.S. government were to default on its obligations—whether to creditors, contractors, or citizens—the economy would quickly shift into reverse.”
As the international community closely monitors these developments, the looming specter of a US default casts a shadow of uncertainty over global financial stability. The potential loss of millions of jobs serves as a stark reminder of the urgency of finding a solution to avert this impending crisis.
Written by Agbo Obinnaya.
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