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

President Joe Biden’s economic advisers estimate that if the world’s leading power permanently stops meeting its fiscal deadlines, it could lose more than eight million jobs this summer and see gross domestic product (GDP) fall by 6%.

Stock markets will unwind for their part by 45% in the third quarter, as those advisors, gathered inside, predicted Council of Economic Advisers White House.

They contend that even in the event of a brief default, the US economy would suffer increased unemployment and recession, but on a smaller scale.

The US CEO deploys this disaster scenario as Joe Biden tries to increase pressure on the conservative camp on public debt.

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

maneuvers and negotiations

And so the President proposed a meeting on May 9 of the key congressional leaders, representing both major parties. The opposition is calling, in return for this vote, to cut public spending.

The issue of raising the debt ceiling, which is a uniquely American demand, was long considered a parliamentary formality, but it began to turn into a political confrontation when Barack Obama was president.

The federal government did indeed hit that famous $31 trillion ceiling in mid-January, but so far has managed the situation with bookkeeping maneuvers.

However, the US Treasury warned that if the vote in Congress fails, the government may find itself forced from June 1 to make significant cuts in some social expenditures.

Before falling into a potentially unprecedented sovereign default situation, which would see America unable to meet certain fiscal deadlines.