As Congressional Republicans continue to risk financial crisis by refusing to take responsibility and ensure America pays its bills on time by working with Democrats to address the debt limit, the writing is on the wall: their partisan games could risk economic calamity and harm millions of Americans as they recover from the financial effects of the COVID-19 pandemic. A recent analysis from Moody’s predicts that a continued standoff over the debt limit as Republicans refuse to take responsibility for America’s financial obligations could “cost the U.S. economy up to 6 million jobs, wipe out as much as $15 trillion in household wealth, and send the unemployment rate surging to roughly 9 percent from around 5 percent.”
A reminder: Republicans’ refusal to address the debt limit isn’t rooted in anything besides partisan politics. After Democrats voted with Republicans three times during the Trump Administration to ensure America did not default, Republicans won’t do the same for a Democratic president.
Here's more from the Washington Post’s coverage of the Moody’s analysis:
Washington Post: U.S. default this fall would cost 6 million jobs, wipe out $15 trillion in wealth, study says
“Despite the national debt increasing by close to $8 trillion under President Donald Trump, Republicans have been adamant that they will refuse to help Democrats increase the debt ceiling, in opposition to President Biden’s spending plans.
“Failure to raise the debt limit would have catastrophic impacts on global financial markets. Interest rates would spike as investors demand a higher rate of return for the risk of taking on U.S. debt given uncertainty about repayment. An increase in interest rates would ripple through the economy, raising costs not only for taxpayers but also for consumers and other borrowers. The value of the U.S. dollar would also decline long term as investors questioned the security of purchasing U.S. treasuries. The cost of auto and home loans would rise.”
“Even resolving the matter before the debt ceiling is breached could hurt U.S. taxpayers and the American economy in the long term. The budget battles over the debt ceiling of 2011 and 2013 under the Obama administration created financial uncertainty and deflated business investment, costing the U.S. economy as much as $180 billion and 1.2 million jobs by 2015, according to Zandi and Yaros.”
“Historically, both parties have come together to ensure the debt ceiling gets raised. Turning it into a political pawn would jeopardize international faith in the U.S. government, driving the cost of borrowing higher, even if it is not breached.”
A reminder: Republicans’ refusal to address the debt limit isn’t rooted in anything besides partisan politics. After Democrats voted with Republicans three times during the Trump Administration to ensure America did not default, Republicans won’t do the same for a Democratic president.
Here's more from the Washington Post’s coverage of the Moody’s analysis:
Washington Post: U.S. default this fall would cost 6 million jobs, wipe out $15 trillion in wealth, study says
“Despite the national debt increasing by close to $8 trillion under President Donald Trump, Republicans have been adamant that they will refuse to help Democrats increase the debt ceiling, in opposition to President Biden’s spending plans.
“Failure to raise the debt limit would have catastrophic impacts on global financial markets. Interest rates would spike as investors demand a higher rate of return for the risk of taking on U.S. debt given uncertainty about repayment. An increase in interest rates would ripple through the economy, raising costs not only for taxpayers but also for consumers and other borrowers. The value of the U.S. dollar would also decline long term as investors questioned the security of purchasing U.S. treasuries. The cost of auto and home loans would rise.”
“Even resolving the matter before the debt ceiling is breached could hurt U.S. taxpayers and the American economy in the long term. The budget battles over the debt ceiling of 2011 and 2013 under the Obama administration created financial uncertainty and deflated business investment, costing the U.S. economy as much as $180 billion and 1.2 million jobs by 2015, according to Zandi and Yaros.”
“Historically, both parties have come together to ensure the debt ceiling gets raised. Turning it into a political pawn would jeopardize international faith in the U.S. government, driving the cost of borrowing higher, even if it is not breached.”