The White House report pointed out that if the United States has a long-term default, 8.3 million people may lose their jobs and economic growth will drop by 6.1 percentage points.

(Reuters file photo)

[Financial Channel/Comprehensive Report] The report released by the White House Council of Economic Advisers (CEA) on Wednesday (3rd) shows that if Congress fails to raise the national debt ceiling, the US economy will be severely damaged, and a long-term default may cause 8.3 million people to lose their jobs , Economic growth fell 6.1 percentage points, and the stock market plummeted 45%.

According to comprehensive foreign media reports, U.S. Treasury Secretary Janet Yellen has previously warned that if Congress and the White House do not reach an agreement, the federal government will exhaust the accounting tools for continuous borrowing and may default on June 1 at the earliest.

Even a less severe scenario would hold back the U.S. economy, according to a new report from the White House Council of Economic Advisers, suggesting that the political confrontation over the debt ceiling will have significant financial costs.

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The CEA also lists three different levels of default and the impact on the U.S. economy.

If under the brinkmanship policy, the negotiations are completed before June 1, and the United States successfully avoids a default, it will still cause about 200,000 people to lose their jobs and reduce the annual GDP (gross domestic product) by 0.3 percentage points; if there is a short-term default, more than The deadline proposed by the Treasury Department, but the problem can be resolved within 1 week, the US economy is expected to lose 500,000 jobs, and the unemployment rate will rise by 0.3 percentage points.

The worst-case scenario is a long-term default, where the stalemate lasts for up to 3 months, will cause 8.3 million people to lose their jobs, the unemployment rate will soar by 5 percentage points, GDP will drop by 6.1 percentage points, and the stock market will plummet by 45%.

The figures are similar to forecasts previously published by Moody's Analytics, which warned in March that a prolonged contraction could result in more than 7 million job losses.

In each case, the U.S. economy would slip into negative growth, from a contraction of 0.3 percentage points to a contraction of 6.1 percentage points, leading to the onset of a recession.

Any recession will be more painful because the government cannot intervene, policy options to help cushion the impact of a recession on households and businesses are limited, federal and state unemployment insurance will not be expanded, and borrowing costs for consumers and the government could soar, the CEA said.

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