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During a CNN town hall with Donald Trump on Wednesday, the former president said the US debt default could be “psychological” and that it “couldn’t be anything” or maybe just a “bad week or a bad day.”

Economists disagree; Many of them.

As the political impasse continues and the day approaches when the nation’s government cannot meet all of its financial obligations, a few economists have released estimates of what the economic impact of the U.S. debt deficit will be. All those assumptions are dire.

If the United States defaults on its debt, it will undermine confidence in the federal government’s ability to pay all of its bills on time, which will affect the government’s credit rating and cause significant turmoil in financial markets.

In the year The United States was in a similar situation in 2011 when it was on the brink of bankruptcy. In that instance, the S&P Global Ratings credit rating agency downgraded the government from AAA to AA+. Federal government It maintains a perfect credit rating from Fitch and Moody’s, but that could change as the dispute progresses.

Investors care about stability and predictability, so a credit rating downgrade sends a chill down Wall Street’s spine. Otherwise, some market tensions are evident. Yields on Treasury bills rose this month in early June, when the Treasury Department is likely to deplete the funds and take extraordinary measures. U.S. debt is used as an important measure for different types of debt, so it increases the cost of borrowing for credit card rates and loan amounts. This makes Americans pay more to borrow — on top of the Federal Reserve’s own rate hikes.

In an analysis of the Brookings Institute’s Wendy Edelberg and Louise Shiner, “Aggravation of defaults would create significant disruptions in financial markets.” “Such financial market disruptions could be accompanied by declining stock prices, loss of consumer and business confidence, and contraction in access to private credit markets.”

Americans’ investments in stocks will take a hit when stocks lose about a third of their value, wiping out nearly $12 trillion in household wealth, according to Moody’s Analytics.

The broader economic impact of the US debt default is a global economic downturn, including massive job losses.

“A default would threaten the gains we’ve made over the last few years in our recovery from the pandemic. And it will trigger a global recession that will push us further back, Treasury Secretary Janet Yellen said Thursday in Japan as she attends a meeting of G7 finance ministers and central bankers.

With the government deficit continuing for months, that could mean 7.4 million job losses in the United States, according to Moody’s Analytics. California will lose 841,600 jobs, Texas will lose 561,700 jobs and Florida will lose 474,700 jobs.

And the housing market, as Yellen once described it, will not recover from the “economic crisis” that the US government has suffered.

Zillow’s new analysis estimates housing costs will rise 22%, rates for 30-year, fixed-rate mortgages will rise more than 8%, and existing home sales will drop 23% with the lowest mortgages.

“A lot of things that we think are part of our financial fabric are being torn apart,” Rohit Chopra, director of the Consumer Financial Protection Bureau, told CNN in an interview on Thursday.

“It’s a big worry. “Every family should be concerned,” he said. “We know from our own knowledge and oversight of the banking system that everyone cares deeply. Corporate America, Main Street, everything can be affected.”

If the US government does not meet its obligations, it will quickly have a major financial impact on tens of millions of Americans.

About 66 million retirees, the disabled, and others receive monthly Social Security benefits. These payments could be delayed if the Treasury doesn’t have enough cash — about $25 billion a week — on hand.

According to the National Committee to Protect Social Security and Medicare, two-thirds of beneficiaries depend on Social Security for half of their income, and for 40% of recipients, the payments cover at least 90% of income.

More than 2 million federal civilian employees and nearly 1.4 million active duty military members have their paychecks delayed. Federal government contractors may also experience payment delays, which could affect their ability to compensate their workers. Certain veterans’ benefits, including disability payments and pensions, may be affected for low-income veterans and their surviving families.

About $25 billion in payments or benefits will be sent to active-duty military, civil service and military retirees, veterans and Supplemental Security Income recipients on the first day of the month, according to the Congressional Budget Office.

A delay in these payments will drag down the economy as consumers will have less money to spend and their confidence will be shaken. This is especially true in areas with many elderly and low-income residents.

What’s more, many federal government payments to states, municipalities, people and others could be affected, with economic consequences. Food stamps and unemployment benefits may be cut.

Deficits in Medicare and Medicaid payments will hurt health care providers, especially small hospitals and doctors’ offices that operate on thin profit margins, according to a report by Moody’s Analytics. If the problem persists, these providers may be willing to treat patients covered by government programs.

— CNN’s Matt Egan contributed to this report.

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