2023-05-04 10:58:21
President Joe Biden’s economic advisers estimate that, if the world’s leading power permanently ceases to honor its financial deadlines, it could lose more than eight million jobs this summer and see its gross domestic product (GDP) plunge by 6%.
The stock markets would unscrew for their part 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 payment default, the American economy would suffer an increase in unemployment and a recession, but on a lesser scale.
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.
Maneuvers and negotiations
The president thus proposed a meeting on May 9 to the main leaders of Congress, representing the two major parties. The opposition is asking, in return for this vote, for a reduction in public spending.
The 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 actually hit that famous $31 trillion ceiling in mid-January, but has so far managed the situation through bookkeeping maneuvers.
However, the US Treasury has warned that, failing a vote in Congress, the government could 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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