If Congress does not increase the country’s debt ceiling, the top economist at Moody’s Analytics is alarming them that a recession is imminent.
Tuesday will see Moody’s Mark Zandi speak before a Senate panel on economic policy regarding the financial repercussions of not raising the country’s borrowing ceiling.
The New York Times was able to receive Zandi’s study before to the hearing, and it reveals that he and his colleagues believe there would be a loss of seven million jobs and a financial catastrophe that is almost identical to the crash of 2008.
Republicans have requested significant expenditure cutbacks in exchange for increasing the debt ceiling ever since regaining control of the House under the leadership of Speaker Kevin McCarthy, a solution that the Biden administration has vehemently rejected.
When Biden presents his most recent budget proposal on Thursday, the discussion will probably reach new heights and threaten another round of budgetary brinkmanship later this week.
In order to continue paying its debts after the US reached its technical debt ceiling on January 19, the Treasury Department had to take “extraordinary measures,” which experts have warned might run out as early as June.
“The only real option is for lawmakers to come to terms and increase the debt limit in a timely way. Any other scenario results in significant economic damage. The economy is very vulnerable. Even without the debt-limit drama, the recession risks are high. It won’t take much to push us in, and this is certainly a lot more than ‘much’,” Zandi said prior to his testimony.
Despite warnings from economists, House Republicans have frequently attacked Biden and his party for the nation’s debt, which has reached $31.4 trillion, despite the fact that spending hikes have been approved by two Republican administrations and two Democratic administrations.