The GOP Default Will Harm Families, Even if it's Just a Close Call
A recent analysis by the Council of Economic Advisors lays out the steep economic costs of failing to pay our existing obligations. If the GOP pushes the United States into a protracted default:
- 8.3 million people would lose their jobs this summer
- The unemployment rate would spike to 8.6%
- Real GDP would shrink by 6.1 percentage points
Breaching the debt limit would be catastrophic, but even the threat of breaching the debt ceiling can have serious economic consequences.
In 2011, Republican debt limit brinkmanship pushed up interest rates on mortgages by up to 70 basis points. If this pattern holds again and the GOP brings us just to the BRINK of default:
- A new homeowner could see their monthly mortgage payment go up nearly $160 thanks to Republicans’ debt limit threats
- This would cost them an extra $58,000 over the life of their loan
- The average worker close to retirement would take a $20,000 hit to their retirement savings, according to analysis by Third Way
- The cost of a small business loan would balloon by $2,500
- The cost of a car loan would be driven up by over $800.