White House Warns of Economic Disaster in Case of Prolonged Default

By Staff, Agencies 

The White House, in the midst of a tug-of-war with Republican opposition over the US debt, predicted Wednesday that the United States would face economic disaster in the event of a prolonged default.

President Joe Biden’s economic advisers estimate that if the world’s leading power stops honoring its financial obligations for good, it could lose more than 8 million jobs this summer and see its gross domestic product plunge by 6 percent.

The stock markets would fall by 45 percent in the third quarter, according to these advisors, who are members of 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 branch is releasing this worst-case scenario at a time when Joe Biden is trying to turn up the heat on the conservative camp over the national debt.

The 80-year-old Democrat says Republicans, who control one chamber of Congress, must quickly and unconditionally vote with Democrats to raise the maximum allowable government debt limit.

He has proposed a May 9 meeting of key congressional leaders representing both major parties. The opposition is demanding a reduction in government spending in return for the vote.