Direxion 3X Russell Funds (TNA)

[3xBuBu]

US default would wipe out nearly 6 million jobs, Moody's says

https://www.cnn.com/2021/09/22/business/us-default-job-loss-prediction/index.html

A US default would be a "catastrophic blow" to America's economic recovery from Covid-19, setting off a downturn that would rival the Great Recession, Moody's Analytics warned in a new report.

If the US defaults on its debt payments and the impasse drags on, the ensuing recession would wipe out nearly 6 million jobs and lift the nation's unemployment rate to nearly 9%, Moody's projected in a report published Tuesday.
The market meltdown would slash stock prices by one-third, erasing about $15 trillion in household wealth, the report found.
"This economic scenario is cataclysmic," wrote Mark Zandi, chief economist at Moody's Analytics.
The US Treasury Department estimates it will run out of cash at some point in October unless Congress raises the debt ceiling. Despite the specter of a default, Republicans have refused to back an increase in the debt limit due in part to concerns about the Biden administration's vast spending plans.
Moody's notes that financial markets are not freaking out about the debt ceiling showdown, suggesting there is widespread belief that Congress will eventually act. The impact on Wall Street has been far smaller so far than during standoffs in 2011 and 2013.
"Ironically, because investors seem so sanguine about how this drama will play out, policymakers may believe they have nothing to worry about and fail to resolve the debt limit in time," Zandi wrote. "This would be an egregious error."