With the deadline to raise the debt ceiling looming and recalcitrant Republicans in Congress threatening to block legislation, economist Mark Zandi of Moody’s Analytics calculated a government shutdown could cost the United States massively, the Washington Post reports.
A prolonged shutdown and lack of federal spending could equate to a loss of six million jobs and a reduction of US household wealth by $15 trillion, Zandi said. “This economic scenario is cataclysmic. … The downturn would be comparable to that suffered during the financial crisis” of 2008, said the report, written by Zandi and Bernard Yaros, assistant director and economist at Moody’s Analytics.
While Republicans voted to increase the debt ceiling multiple times while the debt increased about $8 trillion under the four-year Trump administration, they have vowed to block any effort of the Biden administration to do the same. The debt ceiling does not allow the federal government to spend more money; it allows the government to pay debts incurred previously.