A report of the BPC was published on the The Hill newspaper predicting that the United States is on its way to defaulting on its national debt sometime between October 15th and November 4th if the Congress is unable to raise the ‘roof’.
The new projections of the BPC reduced the window when Washington will likely reach the ‘date x’, when the Treasury Department will run out of cash to honor the country’s obligations, according to the paper.
The United States has never failed to pay its debt, and experts say that not doing it may cause catastrophic damage.
‘Is is uncertain what the Treasure would do in this situation. We have never gone through that. (…) What we do know is that risks would be significant and the costs potentially high’, said Shai Akabas, director of Economic Policy for the BPC, as quoted by the newspaper.
In the words of Akabas, if the Treasury cannot borrow any more money after running out of extraordinary measures, it would have to resort to a series of very risky options, potentially ineffective to soften the blow.