Debt-Limit Breach Could Kill Millions of Jobs, White House Economists Warn
- Prolonged default would see markets crater, GDP plummet
- Even brief default would see jobs lost, economic advisers say
A factory worker assembles a wooden cabinet drawer at a wood shop in Auburn, Kentucky.
Photographer: Luke Sharrett/BloombergThe White House warned ahead of President Joe Biden’s meeting Tuesday with congressional leaders that a breach of the debt ceiling would “likely cause severe damage to the US economy” and that a protracted default could result in millions of jobs lost.
A short default would see half a million jobs lost and unemployment rise by 0.3% while knocking 0.6% off annual GDP, according to a Council of Economic Advisers analysis released Wednesday. A protracted default lasting a full fiscal quarter would see the stock market plummet 45%, GDP fall by 6.1%, and unemployment rise five percentage points, the White House estimated.