President Joe Biden’s government has issued a warning that the pending federal debt crisis might trigger an economic recession.
“Hitting the debt ceiling could cause a recession. Economic growth would falter, unemployment would rise, and the labour market could lose millions of jobs,” the White House said in a letter (pdf) to state and local governments that was released Sept. 17.
Arguing that Congress needs to raise or suspend the U.S. debt ceiling, the administration said the debt crisis may affect the country’s recovery after the pandemic.
If the United States defaults for the first time in its history should Congress not act, a number of federally funded programs could be stopped, the White House letter continued to say. That includes Medicaid, infrastructure funding, and disaster relief efforts.
