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Overseas Network, May 12thCNN issued an article on May 11 saying that if the U.S. government defaults on its debt, it will trigger large-scale turbulence in the financial market and have a major impact on the financial situation of tens of millions of Americans.
U.S. Treasury Secretary Yellen warned on May 1 that the U.S. could default on its debt as early as June 1. The article believes that if the US government fails to repay its debts on schedule, it will dampen people’s confidence in its repayment ability, thereby affecting its credit rating and triggering large-scale turmoil in the financial market. In addition, the broadest economic impact of a U.S. debt default is a recession in the U.S. economy and the global economy.
The article cites forecasts made by institutions such as Moody’s Analytics and real estate information platform Zillow, indicating that in addition to causing financial market turmoil and triggering an economic recession, a US debt default will also affect the livelihoods of tens of millions of Americans.
Specifically, a default on U.S. debt will increase borrowing costs and house purchase costs, increasing people’s repayment pressure and difficulty in purchasing houses; stock prices will fall by 1/3, leading to the evaporation of $12 trillion in investment by U.S. households; if the debt default lasts for several months, even 7.4 million Americans would lose their jobs.
Rohit Chopra, director of the U.S. Consumer Financial Protection Bureau, admitted in an interview with the media on May 11: “Many elements of our financial system will be destroyed (due to debt defaults).” Both businesses and ordinary people could be affected. (Shang Ruiwen, Liu Qiang, an intern at Haiwai.com)
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