Experts warned that the US economy could be decimated this summer as the country could possibly default on its debt amid all crises that the country is currently facing.
The warning comes as the ongoing conflicts across the globe have led few banks to collapse over the past month, with many Americans becoming unsure of the stability of the US economy.
In an opinion written by Republican Journal, the media outlet revealed that “Record-high inflation, along with Democrats being ready to spend more taxpayer money, has GOP lawmakers struggling to put forth a unified front to bring the ever-growing government back under control. Now, as the deadline to raise the national debt ceiling looms yet again, there is a chance the US could default on its debt and decimate the economy this summer.”
The warning comes a month after the Congressional Budget Office (CBO) predicted that the US Treasury would run out of money to cover the country’s bills from July to September.
According to the outlet, “the cash flow could run dry before that if annual income tax payments, which are due on April 18, fall below the expected numbers” and to avoid defaulting, the “Congress would have to raise the $31.4 trillion debt ceiling before the treasury runs out of money. If the federal government did default, it would greatly devalue the US dollar and push interest rates even higher.”
Moreover, the CBO also noted that the budget deficit would “likely hover around $2 trillion until 2033, further fueling the national debt.”
In response to the prediction, several Republican lawmakers have demanded to reduce government spending moving forward.
For instance, during the recent Capitol Hill debate, House Speaker Kevin McCarthy (R-CA), in his new effort, along with the GOP, proposed a new plan, trying to get Democrats to cut back government spending by fixing social programs. However, progressives argued that they would just boost taxes to cover the difference.
Meanwhile, on Thursday, President Joe Biden disclosed to the public his 2024 budget proposal.
According to the President, his new $6.8 billion plan would reduce the federal budget deficit by $3 trillion in five years.
