Default Means 44% of Bills Unpaid, 10% Decline in GDP
The Bipartisan Policy Center has found that if there is no agreement to raise the debt limit by August 2, the Treasury Department would fail to pay 44 percent of its obligations. That 44 percent of government spending, over a year, is equivalent to a real decline in GDP of 10 percent. The number is that high because the Treasury Department has been making fiscal adjustments since March, in order to stave off default. Those adjustment have been pushed as far as possible and cannot continue to push back the deadline, beyond August 2.
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