2023-05-03 22:55:08
The White House, in the midst of a showdown with the Republican opposition over the public debt, predicted economic disaster in the United States on Wednesday in the event of a prolonged default.
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President Joe Biden’s economic advisers estimate that if the world’s leading power permanently ceases to honor its financial deadlines, it might lose more than 8 million jobs this summer, and see its Gross Domestic Product plunge by 6%.
The stock markets would unscrew them by 45% in the third quarter, predict these advisers, gathered within the “Council of economic advisors” of the White House.
They assure that even in the event of a brief default, the American economy would suffer a rise in unemployment and a recession, of lesser magnitude.
The US executive publishes this disaster scenario as Joe Biden tries to increase the pressure on the conservative camp over the public debt.
The 80-year-old Democrat says Republicans, who control one of the houses of Congress, must quickly and unconditionally vote with Democrats to raise the maximum allowable public debt limit.
He proposed a meeting on May 9 of the main congressional leaders, representing the two major parties.
The opposition is asking, in return for this vote, for a reduction in public spending.
This issue of raising the debt ceiling, a unique US demand, was long considered a parliamentary formality, but began to turn into a political confrontation when Barack Obama was president.
The federal government has actually reached this famous ceiling, of 31,000 billion dollars, in mid-January, but has so far managed this situation by accounting manoeuvres.
However, the US Treasury has warned that, failing a vote in Congress, the government might find itself obliged as of June 1 to make drastic cuts in certain social expenditures.
Before possibly falling into a sovereign default situation, completely unprecedented, which would see America unable to meet certain financial deadlines.
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