If Congress and the White House are unable to approve a debt settlement by June 1, the United States currently runs the prospect of economic disaster. The destruction worsens over time.
Formally, the nation’s interest funds on its debt weren’t due till the 15th of every month, a whole 2 weeks after the Treasury issued a warning that the country’s resources would run out. However, suppose the country exceeds the debt ceiling. In that case, the Treasury Department will first skip crucial government benefits including Social Security, federal paychecks, refunds on taxes, and numerous others before that interest rates are scheduled in mid-June.
“Everything goes from getting bad to even worse, to terrible” in just a couple of days if the U.S. starts skipping payouts, stated Mark Zandi, chief economist for Moody’s Analytics.