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The transition of the US House of Representatives under the control of the Republicans threatens America with a default. The fact is that the Republicans have already stated that they do not intend to allow the US national debt to be raised even higher – above the current almost 31 trillion dollars.

In this regard, this comment published on the website of the White House in the fall of 2021 is interesting, which explains what will happen if the United States defaults. And now we have the possibility that the Republicans can take such a step, and America will not be able to fulfill its financial obligations.

The US political class would not want to bring the situation to such a budget crisis. But with the current split in Washington, it is becoming increasingly difficult to keep the situation under control – as the chaotic election of a new speaker has recently shown. In this regard, nothing can be ruled out – and the Treasury is only seriously preparing for the threat of default.

So, this is the text from official White House site:

“The credit of the United States is built on centuries of stability and responsibility. This country has never intentionally defaulted on its obligations because of the debt limit…

A default would fundamentally hinder the Federal government from serving the American people. Payments from the Federal government that families rely on to make ends meet would be endangered. The basic functions of the Federal government — including maintaining national defense, national parks, and countless others — would be at risk

Furthermore, a default would have serious and protracted financial and economic effects. Financial markets would lose faith in the United States, the dollar would weaken, and stocks would fall. The U.S. credit rating would almost certainly be downgraded, and interest rates would broadly rise for many consumer loans, making products like auto loans and mortgages more expensive for families who are subject to interest rate changes or taking out new loans. These and other consequences could trigger a recession and a credit market freeze that could hurt the ability of American companies to operate

The Federal government would be immediately impaired from carrying out its basic functions, including providing the financial assistance that tens of millions of Americans rely on.

Everyone in America would feel the effects of a default. If the United States were to default, tens of millions — including families with children, retirees, and veterans — would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet…

If the Federal government ended up missing or delaying payments, millions would be unable to put food on the table or pay rent. Before the full weight of the Federal pandemic response had come to bear, the hardships experienced early on — exemplified by families going hungry and waiting in food lines — remind us of the raw misery that inadequate Federal support brings in the wake of an economic shock…

There are many other functions of the Federal government that we often take for granted and that would be in peril after a default. For example, the Federal government keeps our country safe by paying the salaries of 1.4 million active duty military personnel and their families. The deployment of personnel, the maintenance of equipment, the procurement of supplies, and other support activities would risk being frozen after a default, hampering the defense of the country at a time when there are ample threats to national security. The same holds for expenses related to counter-terrorism and intelligence measures, which could leave America more vulnerable to potential threats

There are also services that, many Americans probably do not realize, depend on Federal support. For instance, in the event of a default, the National Weather Service might struggle to deliver important weather information to families, local news stations, and businesses. The ability to listen to and communicate via radio would be at risk, as the radio telecommunication system is organized by the Federal Communications Commission. Even the official time of the United States is maintained by the National Institute of Standards and Technology, which is crucial to computing and travel, since GPS devices are reliant upon accurate official clocks.

The effects of a default go far beyond the lack of financial assistance to those in need. Everyday services crucial to a functioning society — many of which seemingly run in the background of our lives — would be at risk. An inability to pay for these services would cause large disruptions for the entire country.

Markets and consumers would be hurt by even the threat of a default, much less an actual default.

Finally, a default — or even just the threat of one — would have a devastating impact on our economy…

The consequences of a default could accelerate rapidly if not resolved, potentially inducing a global financial crisis and a recession.

If the United States does default, the consequences could escalate rapidly and profoundly… The global economy, which relies on a strong U.S. economy, would begin to slide into a financial crisis and likely, a recession. U.S. Treasury debt is the world’s benchmark safe asset, and its interest rates act as the basis for the pricing of countless financial products and transactions around the globe. The U.S. dollar is also the world’s premier reserve currency. A default would send shock waves through global financial markets and would likely cause credit markets worldwide to freeze up and stock markets to plunge. Employers around the world would likely have to begin laying off workers…

Just the threat of a default has negative effects on the U.S. economy, and an actual default for any amount of time would inflict a devastating blow that would be felt by families, businesses, and the economy here and globally for decades to come.

The debt ceiling is not and should not be used as a political football. The consequences are too great.”…In short. The United States cannot live without throwing new money into the economy, which provokes inflation. Without more emission and increased debt, the American government simply cannot function. Puzzling choice – one can twist his neck. If not a default, then a dead end.

International Affairs


SAKHRI Mohamed
SAKHRI Mohamed

I hold a bachelor's degree in political science and international relations as well as a Master's degree in international security studies, alongside a passion for web development. During my studies, I gained a strong understanding of key political concepts, theories in international relations, security and strategic studies, as well as the tools and research methods used in these fields.

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