ICYMI: Leading Economic Experts Warn of Severe Consequences of Default

May 9, 2023

ICYMI: Leading Economic Experts Warn of Severe Consequences Ahead of President’s Meeting on Debt Ceiling

Yesterday, leading economists and experts warned of the economic consequences of default and Speaker McCarthy’s proposed legislation.

The press briefing, which featured remarks from Lindsay Owens, Executive Director of Groundwork Collaborative, Mike Konczal, Director of Macroeconomic Analysis at the Roosevelt Institute, and Angela Hanks, Chief of Programs at Demos, took place ahead of President Biden’s meeting with House and Senate Leadership today as we hurtle toward a June 1 “X-date.”

Select quotes from the briefing are below and you can find a recording of the press briefing here.


Lindsay Owens, Groundwork: 

“We can’t afford to undo the extraordinary economic progress we’ve made in the last two years. President Biden should not agree to negotiate a deal on the debt ceiling that increases unemployment or slows growth – not when there are a myriad of easier and softer ways to avoid default.”

“We’re at a 53-year record low in unemployment. It would be an incredible tragedy to undermine the gains that we’re finally seeing in the labor market, particularly for marginalized workers.”

Angela Hanks, Demos: 

“The labor market is actually starting to produce gains for workers who tend to be the last hired and first fired. But the dangerous brinkmanship over the debt ceiling and the extremist position that Speaker McCarthy has staked out really poses a deep threat to that progress and threatens to trigger a recession.”

“We’re seeing the proposed (House Republican) cuts will be borne by people who are already marginalized… who cannot afford to have another economic crisis triggered by our politics. This default would be a crisis for our economy and our democracy, and it threatens to devastate communities across the country.”

Mike Konczal, Roosevelt Institute: 

“Any time would be a bad time to default, but right now, in particular, would be pretty catastrophic. Social security payments would immediately be delayed. That would cause hardships for many, and immediately start to cause consumers to panic and stop spending, which would slow the economy and immediately put it into a recession.”

“The conservative agenda right now is to try to reduce the standard of living for many people without having to have their fingerprints on it.”