A new Moody’s Analytics report warns of a potential economic disaster if Washington leaders don’t agree to a debt ceiling deal soon. If the U.S. defaults on its debt for an extended time, serious job loss across the country is predicted.
Treasury Secretary Janet Yellen is ringing the alarm bell, predicting we could be out of cash by early June. Moody’s report shows that no state would escape the pinch, but some would feel it more.
States with a heavy presence of federal workers, government-funded jobs, or those reliant on federal institutions like national labs or military bases are in a danger zone. Washington, DC, Alaska, Hawaii, New Mexico, Ohio, Pennsylvania, and Florida are in the line of fire with potential job losses in the hundreds of thousands. The ripple effect would be huge; unemployment rates could skyrocket to near double digits. We’re talking 8.9% in DC, 8.7% in California, and a whopping 10.8% in Michigan.
States like Virginia, Connecticut, Kansas, and Washington also depend heavily on federal spending and aerospace. The chief economist of Moody’s, Mark Zandi, warns that what once seemed unimaginable now seems a real threat.