What would happen if the US defaults on its debt?

Una vegada més, l’habitual estira-i-arronsa polític al Congrés dels Estats Units provocat per la necessitat cíclica d’incrementar el sostre de deute ve acompanyat de la histèria mediàtica sobre un possible ‘default’. Però hi ha una possibilitat real que el país incorri en una suspensió de pagaments? Quines conseqüències tindria per l’economia global?

A diferència d’altres països, on es posa un límit a la despesa governamental, als Estats Units, el Congrés estableix un límit màxim de deute federal – actualment fixat en 31,381 bilions de dòlars – que el govern pot adquirir per a finançar les seves despeses i obligacions. El sostre de deute no limita la capacitat del govern per a incórrer en despeses, sinó que restringeix l’emissió de bons del Tresor, és a dir, nou deute que fa servir per atendre les seves obligacions financeres. La teoria és que en limitar la quantitat de deute que es pot acumular, es restringirà la despesa.

El sostre de deute es va establir per primera vegada el 1917 per a finançar l’entrada dels Estats Units en la Primera Guerra Mundial. Des de llavors, s’ha incrementat en 102 ocasions pel poder legislatiu. Aquest límit s’ha tornat especialment rellevant en els últims anys a causa de l’alt nivell de dèficit pressupostari, pràcticament crònic, que registra el país. Les polítiques enfocades a la despesa militar i a programes socials, la menor recaptació tributària per la reducció d’impostos i l’impacte de la crisi sanitària, són alguns dels factors que han contribuït al dèficit públic.

A la pràctica, però, limitar el sostre de deute s’ha mostrat del tot insuficient a l’hora de controlar el deute. El Govern segueix gastant diners amb dèficit i el deute continua creixent, i el que és pitjor, es fa servir com a excusa per alimentar el xantatge polític entre els dos partits dominants, que sovint posen en perill la salut de l’economia del país per interessos propis. Com va declarar recentment la presidenta del Banc Central Europeu, Christine Lagarde, “Entenc la política, però arriba un moment en què han de prevaler els interessos primordials de la nació”.

La importància del sostre de deute es va posar de manifest en 2011, quan el Congrés va estar a punt de no augmentar el límit, la qual cosa hauria portat a un impagament del govern estatunidenc. L’expresident Barack Obama es va veure forçat a retallar despeses en programes socials per arribar a un acord polític que permetés augmentar el sostre de deute i evitar l’impagament. Un estira-i-arronsa polític que va provocar l’única rebaixa de la qualificació creditícia en la història del país.

Implementation of extraordinary measures

On 19 January, President Joe Biden’s administration reached the debt ceiling of $31.381 trillion, so the country cannot issue any more bonds to finance itself. This means that if an agreement is not reached with the opposition this summer, the country will enter technical bankruptcy. Although the first meeting to advance negotiations between House Speaker Kevin McCarthy and the speaker took place on 1 February, the White House and Republican leaders in Washington are far from reaching a deal to avert disaster.

The Treasury Department can use a range of accounting manoeuvres to pay the government’s bills, but these extraordinary measures are temporary and can only prevent a default until 5 June. Once these measures and the available cash are exhausted, the repercussions could be devastating for the country’s economy.

In this context, Treasury Secretary Janet Yellen announced to members of Congress that she planned to redeem existing investments and suspend new investments from the Civil Service Retirement and Disability Fund and the Postal Fund. As well as suspending reinvestment in government securities bonds from the federal workers’ retirement and savings plan. 

Consequences of a default

Despite the low probability of a default – approximately 2%, according to modelling by research provider MSCI shared exclusively with CNN – if no agreement is finally reached, the country would be left without sufficient liquidity to meet all its payments. Firstly, it would enter into what is known as a technical default, which is a prolonged period of default on some or all of the country’s financial liabilities. This would double the unemployment rate and possibly trigger an economic recession, increasing inflationary pressure. In addition, the US credit rating would be downgraded, just as in 2011.

Even more serious would be a real default, in which the government would run out of money to pay its obligations, causing an economic catastrophe. The consequences are virtually unpredictable, as there is no contemporary precedent, but some economists predict that unemployment would soar to over 12% and the economy would shrink by more than 10%, triggering a deep recession that would trigger inflation.

In addition, Social Security payments and federal pensions could cease, accompanied by massive lay-offs of public administration employees, affecting the security forces, the transport department and the airport administration, which would stop their activity unless the government implemented emergency measures.

Given the globalisation of the monetary system and the fact that about 75% of US government debt is held by domestic and foreign investors – including governments of other countries that account for about a third of this public debt – such a default would likely cause not only the American but the world economy to plummet.

On the other hand, many countries with economic ties to the United States depend on the stability of the US economy and, in return, on the dollar. A suspension of payments would raise borrowing costs for the US government and businesses, but also for other countries, slowing down investment, neutering global economic growth and pushing up the price of gold as a safe-haven asset in the face of collapsing economies. Moreover, this crisis would further accelerate a decoupling from the established, US-dominated monetary system, by the large emerging economies that have been working for years to lay the groundwork of a multipolar world with an alternative monetary system.

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