If America defaults, it will have disastrous consequences
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America’s ability to borrow is considered its superpower. If he is not able to do this for the first time, then it will affect his image. America is considered the best place for investment in the world. There is always a demand for loans from the US government. This keeps interest rates low and makes the dollar the world’s reserve currency. US government bonds are considered the most attractive in the world. For this reason, the US government spends lavishly on everything from defence, to schools, roads, infrastructure, technology and science. If the US defaults on debt payments, all outstanding series of bonds will be affected. These include bonds issued in global capital markets, government to government credit, foreign currency denominated loan agreements with commercial banks and institutional lenders.
America defaulted
If America defaults, it will have dire consequences. White House economists say that this will eliminate 8.3 million jobs in the country, clear the stock market by half, GDP will fall by 6.1 percent and the unemployment rate will increase by five percent. Interest rates in the country have reached their highest since 2006, the banking crisis continues to deepen and the dollar is getting thinner. The probability of recession in the country is 65 percent. If America defaults, it is sure to get stuck in recession. Its effect can be seen all over the world.
The debt limit is the limit up to which the federal government can borrow. Since 1960, this limit has been increased 78 times. Last time it was increased to $ 31.4 trillion in December 2021. But it has gone beyond this limit. According to a blog post by the White House Council of Economic Advisers, if the debt ceiling is not raised, the country will be doomed. There will be huge loss to the economy. The boom in job growth that is being seen now will be derailed. Lakhs of jobs will be lost.
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