Possible debt default may drag U.S., the world into crisis: CNN

WASHINGTON, Oct. 1 (Xinhua) -- A possible debt default of the U.S. government, if its debt ceiling remains unchanged, will lead to a series of consequences and a global crisis finally, warned a news analysis carried by CNN Wednesday.

"The United States is heading for a cliff -- and taking the world with it," the article said.

U.S. Treasury Secretary Janet Yellen said on Tuesday that U.S. lawmakers have until Oct. 18 to raise or suspend the debt limit before the country is expected to default on the national debt.

If the U.S. government defaults, the article said, it will fail to pay interest on its debts, leading to a rise in the rates it pays to borrow money, which means that mortgages, car loans and credit card bills will go up, and "millions of Americans would probably lose their jobs and the slowing pandemic recovery would crash."

Military salaries, government retirement payments and other benefits will also dry up, it said.

"Since the stability of U.S. debt is the bedrock of the global economy, a default by Washington could plunge the rest of the world into crisis," the article wrote.

On Thursday, U.S. President Joe Biden signed a short-term funding bill after Congress passed the measure, averting a partial government shutdown that was set to begin midnight. With the stopgap funding bill approved, Democrats will need to act quickly in the coming days on the debt limit.

The debt limit, commonly called the debt ceiling, is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.