Former President Donald Trump has called on congressional Republicans to risk the stability of the United States and global economy by defaulting on the nation's debt if Democrats do not pass "massive" spending cuts in exchange. Speaking at a CNN town hall event in South Ayrshire, Scotland, Trump predicted that such a move would not be necessary as Democrats would eventually cave under pressure.
The comments come as the Treasury Department is expected to run out of special measures used to delay breaching the debt ceiling as early as next month. Economists have long warned that a default could send the US economy into a downward spiral with repercussions felt worldwide.
During his remarks, Mr. Trump stated: "If they don't agree to our terms, then we'll have to do a default." He added that failing economies across Europe are due in part because of these defaults and suggested that America should follow suit if an agreement cannot be reached.
The top four congressional leaders, including House Minority Leader Kevin McCarthy—a staunch supporter of former President Trump—are set to meet again this Friday in order to discuss solutions regarding the impending debt ceiling crisis.
Treasury Secretary Janet Yellen has previously indicated that without intervention from Congress, the US government could hit its borrowing limit by June 1st. This deadline raises concerns over possible chaos within financial markets and millions of job losses resulting from potential economic collapse.
In response to criticism about adding trillions more dollars onto national debts during his own presidency, Mr. Trump deflected responsibility by claiming he can no longer influence legislation or garner support for passing bills through Congress now he is out of office.
However, economists remain wary about using threats related solely towards political gain at such high stakes—the White House Council of Economic Advisers projects catastrophic consequences if America were forced into default; it estimates over eight million people would lose their jobs while stock markets plunge nearly 50% within just three months.
As the clock continues to tick towards a potential default, it remains uncertain whether Democrats and Republicans can reach an agreement on raising the debt ceiling in time to prevent disastrous economic consequences.