The White House fears an economic disaster in the event of a prolonged default

The White House fears an economic disaster in the event of a extended payment


The White House, in the midst of a showdown with the Republican opposition over the public debt, on Wednesday predicted economic disaster in the United States in the event of a prolonged default.&nbsp ;

President Joe Biden's economic advisers believe that if the world's leading power permanently ceases to honor its financial deadlines, it could lose more than 8 million jobs this summer, and see its Gross Domestic Product plunge by 6%.

The stock markets would drop by 45% in the third quarter, predict these advisers, meeting within the White House's “Council of economic advisors”.

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 American executive publishes this disaster scenario as Joe Biden tries pressure on the conservative camp over the public debt.

The 80-year-old Democrat says Republicans, who control one house of Congress, must quickly and unconditionally vote with Democrats to raise the maximum authorized public debt ceiling.

He proposed a meeting on May 9 with the main leaders of Congress, representing the two major parties.

The opposition is demanding, in return for this vote, 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 actually hit that infamous $31 trillion ceiling in mid-January, but has so far managed it through accounting manoeuvres.

The U.S. Treasury, however, has warned that, failing a vote in Congress, the government could find itself obliged from June 1 to make drastic cuts in certain social expenditures.

Before possibly falling into a situation of sovereign default, completely unprecedented, which would see America unable to meet certain financial deadlines.