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If America defaults, 7 million people will lose their jobs: Moody’s

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America, the world’s most powerful country, has come close to defaulting for the first time in its history. The country’s Finance Minister Janet Yellen has warned that if the debt limit is not increased by June 1, the US may default. If America defaults, it will have serious consequences.

According to Moody’s Analytics, if America defaults, 7 million jobs will be lost in the country. The unemployment rate will skyrocket up to eight percent. There will be a decrease of four per cent in GDP. There will be a decline of 20 percent in the stock market. People’s wealth worth 10 trillion dollars will be washed away.

This warning has been given in a report prepared under the leadership of Moody’s Chief Economist Mark Jandy.

Although US President Biden has expressed hope that the debt limit will be agreed upon. The Biden administration is in daily talks with Republican lawmakers on this issue.

The debt ceiling is $31.4 trillion. The debt ceiling is the limit for how much the federal government can borrow. This limit has been increased 78 times since 1960. Ultimately, in December 2021, this limit was raised to $31.4 trillion.

On the other hand, rating agency Fitch has placed America’s AAA rating on negative watch. Also indicated to downgrade the credit rating. However, Fitch expressed hope that a political consensus would be reached and the debt ceiling would be raised.