White House Warns of Millions of Job Losses, ‘Severe Damage’ to Economy If US Defaults on Debt

A continued breach of the U.S. debt ceiling could result in “significant disruptions” to financial markets and “severe damage” to the economy, including more than 8 million job losses, the White House has warned.

In a report published on May 3, the White House Council of Economic Advisers stressed that a historic U.S. default on its debt obligations—referred to as the “X-date”—is fast approaching, and such a move would see the economy “quickly shift into reverse.”

The warning comes just days after Treasury Secretary Janet Yellen said the United States could default on its financial obligations as early as June 1 unless Congress takes action to raise the nation’s $31.4 trillion debt ceiling.

White House economists warned of three possible scenarios that would likely happen if negotiations between Republicans and Democrats regarding the debt limit are further prolonged: brinksmanship, a short default, and a protracted default.

A continued breach of the U.S. debt ceiling could result in “significant disruptions” to financial markets and “severe damage” to the economy, including more than 8 million job losses, the White House has warned.

In a report published on May 3, the White House Council of Economic Advisers stressed that a historic U.S. default on its debt obligations—referred to as the “X-date”—is fast approaching, and such a move would see the economy “quickly shift into reverse.”

The warning comes just days after Treasury Secretary Janet Yellen said the United States could default on its financial obligations as early as June 1 unless Congress takes action to raise the nation’s $31.4 trillion debt ceiling.

White House economists warned of three possible scenarios that would likely happen if negotiations between Republicans and Democrats regarding the debt limit are further prolonged: brinksmanship, a short default, and a protracted default.