The U.S. government is currently discussing the possibility of raising its debt ceiling, which is the legal limit on government borrowing.
If the U.S. does not raise the debt ceiling, it could eventually face a shortage of funds for public spending. This would lead to chaos in the U.S. economy and have ripple effects worldwide. Discussions about the possibility of the U.S. raising its debt ceiling have prompted concerns about the potential effects of a debt default.
In 2011 and 2013, when similar situations occurred, the global economy experienced severe turmoil. Economist Mohamed El-Erian warns that a failure to raise the debt ceiling could even push the U.S. toward a possible recession.
Without an increase in the debt ceiling, the U.S. would struggle to fulfill its financial obligations, including social welfare programs, healthcare, defense, education, public safety, and more. The impact would also extend to international trade, affecting economies such as China, Japan, South Korea, Canada, Germany, Mexico, the United Kingdom, France, and others.
To understand the public sentiment on this matter, Real Research, an online survey app, has conducted a survey to gather insights on the U.S. debt ceiling and the potential consequences of a debt default.
- 33.75% of respondents showed moderate concern about not raising the U.S. debt ceiling.
- 33.57% believed other countries’ economies would be impacted if the U.S. defaulted.
- 45.36% foresee a financial crisis similar to 2011 and 2013 if the U.S. defaults on debt.
The U.S. debt ceiling has been a hot topic in recent months. The debt ceiling is the maximum amount of money the U.S. government can borrow by issuing bonds.
When the debt ceiling is reached, the Treasury Department must find other ways to pay expenses, such as cutting spending or raising taxes. If the government cannot pay its debts, it could default on its loans, devastatingly impacting the U.S. economy.
According to the survey on the U.S. debt ceiling and the effects of a debt default, we found that a majority of our respondents (72%) are aware of the possibility of raising the U.S. debt ceiling, while 28% had not.
In the following poll, when the respondents were asked how likely the U.S. would default on its debt, we found that 42% said it was somewhat likely, while 30% stated highly likely. On the other hand, 15% said it was somewhat unlikely and 6% stated it was highly unlikely.
Public Concern Grows Over Potential Consequences of U.S. Government’s Failure to Raise Debt Ceiling
There is growing concern among the public regarding the potential consequences of the U.S. government’s failure to raise the debt ceiling and the risk of defaulting on its debts. As discussions continue regarding the debt ceiling, there is apprehension about the impact it could have on the economy.
Figure 1 presents public sentiment and data gathered through our U.S. debt ceiling survey, providing insights into the level of concern and perceptions surrounding this critical issue.
Results revealed that 34% of the respondents are somewhat concerned and 27% are highly concerned. Whereas 24% are somewhat unconcerned, 7% are not concerned at all, and 9% remained uncertain.
Furthermore, we asked the respondents about the likelihood of the U.S. falling into a recession if the debt ceiling is not raised. More than half of the respondents (56%) said highly likely, 30% said somewhat likely, 5% stated somewhat unlikely, and 2% stated highly unlikely.
Potential Global Impact: U.S. Debt Default Threatens Economic Stability
If the U.S. defaults on its debts, economies globally are likely to be affected. The U.S. is the world’s largest economy, and its debt is held by investors around the world. A default would damage the U.S. credit rating, making it more expensive for the U.S. to borrow money in the future. This would make it more difficult for the U.S. to finance its operations, which could lead to further economic problems.
According to our survey results, we found that 34% of the respondents said other countries’ economies would be most affected if the U.S. defaults on its debts. In addition, 31% said it would totally affect, 23% said it would mostly not affect, and 13% said it would totally not have any effect.
Similarly, we inquired with the respondents whether they believed that a potential U.S. default could result in a financial crisis similar to those witnessed in 2011 and 2013.
Results revealed that nearly half of the respondents (45%) believed it was somewhat likely and 41% believed it was highly likely. On the other hand, 10% believed it was somewhat unlikely and 3% believed it was highly unlikely.
Lastly, the survey asked the respondents how confident they felt in the ability of the U.S. government to reach an agreement to raise the U.S. debt ceiling before it ran out of funds to meet all its financial needs. 41% of the respondents were somewhat confident, 30% were very confident, 17% were somewhat not confident, and 3% were very unconfident.
Meanwhile, 9% of the respondents remained unsure of an answer.
|Survey Title||Survey on the U.S. Debt Ceiling and the Effects of a Debt Default|
|Duration||May 27, 2023 – June 3, 2023|
|Number of Participants||10,000|
|Demographics||Males and females, aged 21 to 99|
|Participating Countries||Afghanistan, Algeria, Angola, Argentina, Armenia, Australia, Azerbaijan, Bahrain, Bangladesh, Belarus, Benin, Bolivia,… Brazil, Brunei, Bulgaria, Burkina Faso, Cambodia, Cameroon, Canada, Chile, China, China (Hong Kong) China (Macao), China (Taiwan), Colombia, Costa Rica, Croatia, Czech Republic, Ecuador, Egypt, El Salvador, Ethiopia, Finland, France, Gambia, Georgia, Germany, Ghana, Greece, Greanada, Guatemala, Honduras, Hungary, India, Indonesia, Iraq, Ireland, Israel, Italy, Ivory Coast, Japan, Jordan, Kenya, Kuwait, Kyrgyzstan, Latvia, Lebanon, Libya, Lithuania, Malaysia, Maldives, Maluritania, Mexico, Moldova, Mongolia, Morocco, Mozambique, Myanmar [Burma], Namibia, Nepal, Nicaragua, Nigeria, Oman, Pakistan, Palestine, Panama, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Sierra Leone, Singapore, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Tanzania, Thailand, Togo, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen, Zimbabwe.|
Real Research News is the media platform that presents insights and studies of wide-range of topics. It focuses on insights gathered from its survey app.