The Debt Ceiling Crisis JUST Crashed Stocks | Here's Why.

well it happened again the stock market

was going up and then it went straight

down as soon as there was some pessimism

over the debt ceiling so why is there so

much pessimism over the debt ceiling

well one of the reasons is some say the

stock market could tank as much as a 40

percent if we fail to lift the debt

ceiling and actually pay Our obligation

if we default we could also potentially

see according to Moody's the

unemployment rate rise as high as 1.6

percent that is we could lose around one

and a half million jobs within the first

week of a default within just two months

of a default we could end up losing four

to six times that amount of jobs and see

the unemployment rate Skyrocket from the

current 3.4 percent to 7.8 percent now

Joe Biden did come back from his G7

meeting to meet with house Speaker Kevin

McCarthy in an attempt to break the

deadlock however and unfortunately we

yet have no results

and that's been pretty typical for

congress in fact things always seem to

run up so close to the deadline that as

soon as we get close to the deadline

people start asking is that really

actually the deadline and that's in fact

what started happening today today Kevin

McCarthy in a message to members of the

House of Representatives says quote we

are nowhere near a deal which is a

problem because we are certainly near

the deadline the X date which is when

the treasury Department is expected to

run out of cash is expected to be June

1st this is what the treasury Department

is telling us now Goldman Sachs thinks

that date could actually be more like

this sixth to the eighth this has

started to create some skepticism from

Republicans and much like I just alluded

to anytime Congress seems to get close

to a deadline the first thing they do

rather than get their job done is start

question the deadline and since this

deadline is being sent by Janet Yellen

who's the Secretary of the Treasury

Department which is a leading role in

the Biden Administration making Janet

Yellen a part of the Biden

Administration Republicans are now

questioning

really need to get this done by June 1st

and that sort of dialogue is sending the

stock market straight down now there is

some argument to be made by at least

some on Wall Street that perhaps we

could actually get to June 15th and if

we make it to June 15th by figuring out

how to pay our bills between June 1st

and June 15th then perhaps we'll get a

new inflow of tax revenues so we'll get

revenues coming in so we'll write that

as tax ours and that could potentially

help give us an extra 30 days in

negotiations because we'll have an extra

30 days to be able to pay our bills and

so a lot of folks are hoping this deal

obviously gets done by the first there

does seem to be some wiggle room on the

date of the first that is the exact X

date unfortunately the stock market is

getting very nervous about that even

though the market has been doing very

well it's recently getting quite nervous

because we are knocking on the door of

the first now even though today at a

time of this recording is actually only

the 23rd there are a lot of folks in

Congress that say we actually need 10

days to be able to come to an agreement

write a bill pass it sign it and enact

it well unfortunately if you had 10 days

to this even with the 31st considered

you're already past June 1st now we've

seen last minute deals get done all of

the time and I imagine Janet Yellen has

some flexibility built into her June 1st

deadline but and unfortunately the

treasury Department has already issued a

memo requesting United States

departments to start

well counting their pennies and letting

the treasury Department know if the

treasury could potentially delay sending

payments to those agencies and that's

sending more fears again for the stock

market doesn't help that about 50

Senators have so far accepted sat phones

as a sort of an anti-cyber attack

measure in case there happen to ever be

an issue it just happens to be odd

timing that just about a week and a half

before a potential United States default

we would see talk about 50 Senators

receiving satellite phones so they can

communicate with each other in the event

that cell phone service is no longer

available technically the House of

Representatives did pass a plan now

those folks are not the ones getting

satellite phones though and maybe that's

routine for senators still a little

weird but anyway under the McCarthy plan

passed in the house most are looking at

the McCarthy plan as simply a well

showpiece so that way Republicans can go

on mainstream media and argue hey we

already did our job we already passed a

debt ceiling increase this is actually

kind of exactly what the House of

Representatives did when Democrats were

in power under Nancy Pelosi during covid

remember the heroes act we already

passed another stimulus package it's

Mitch McConnell and Republicans holding

it up it's the same thing in Reverse now

they all do we to each other there's

nothing unique here it's just now

Republicans like Ted Cruz and other

speakers are able to go on to Fox News

or CNN and argue we already passed a

plan it's Democrats holding it up it's

Joe Biden holding it up is he even

capable of making sure the debt ceiling

can get past her or their woke 20 and 30

year old leftists running the White

House who actually want to default

because they don't understand how sacred

the U.S dollar is who knows but we do

know that Moody's is estimating that a

GDP would decline from 2.25 to about 1.6

percent in 2024 under the McCarthy plan

and we could actually see job losses of

around 780

000 job losses as a result of some of

the cuts that would be instituted via

the McCarthy plan this is according to

Moody's but then again we expect this to

be a showpiece this is sort of the

initial offer right it's like when you

make an offer on an uncompetitive

listing for Real Estate I'm going to

start a little lower and it's on the the

Democrats to counteroffer and of course

Joe Biden has met with McConnell and

McCarthy in person to work on these

negotiations but unfortunately we just

haven't been making much ground in those

negotiations yet we'll talk about what

that middle ground might look like but

it's worth noting that 55 percent of

Republicans in America right now

actually think America should just

default let it happen this is actually

very similar to what I recall is the

2016 election where people sort of

thought you know what I kind of want

Donald Trump to get in there and throw

the furniture around let's just see what

happens maybe then we can finally get

things organized and I think that's how

a lot of Republicans feel now about the

debt that we're spending on an

unsustainable path and that if we don't

address the debt issues in our spending

problem now then when will we now of

course we can all share frustrations

over why it is that we pass bills and

then have to negotiate a debt limit

increase afterwards when those bills

authorize the spending it's kind of like

voting for bills twice but then again

this is how it's been for over a hundred

years actually 106 years to be exact and

we've extended the debt limit

78 times we've never not extended the

debt ceiling limit so we'll probably

extend it again now there is this idea

of maybe using the discharge position a

petition which would and require five

Republicans to hop on over and support

of Democrats and shove something through

the House of Representatives in well

opposition to Kevin McCarthy and most

Republicans and then of course the

Senate which is democratically

controlled would pass it and Joe Biden

would sign it this is relatively

unlikely as you'd probably be looking at

career suicide for these five

Republicans however maybe they'd be

throwing themselves on the line to save

America from default but then again that

would upset a lot of Republicans who are

like let's just evil like if if that's

what it takes to actually get our act

together on spending then maybe that's

what we need to do a lot of folks

talking about the 14th Amendment which

is sort of this interesting

constitutional back and forth where

you've got Republicans saying we got the

Second Amendment and then you've got

Democrats saying well we got the 14 18th

which says we shall not default on our

obligations though this is going to be

quite legally questionable and up for a

lot of debate and probably the last

thing we want to do is use the 14th and

then have a Court rule it

unconstitutional the Supreme Court leans

Republican and then we end up defaulting

and now we're already in default mode

much like the Second Amendment gets

caught up in court regularly about okay

well how far does the Second Amendment

go it's you know we are told the Second

Amendment shall not be infringed but

then again courts regularly declare that

while we are allowed to have background

checks or requirements or limitations

rather on the type of guns or ammunition

that can be used or carried in various

different states

that's really a topic for a different

video then you've got this idea that the

Federal Reserve will be able to break

some kind of emergency glass window and

Save Market I'm sure the Federal Reserve

will have some tools but I wouldn't rely

on the Federal Reserve the FED probably

doesn't want to get to this level either

but you do have a lot of Republicans

questioning hey maybe uh maybe the FED

can do something and maybe this June 1

deadline isn't really a June 1 deadline

Democrats of course are looking for

potentially raising revenues which is

just a fancy way of saying tax more

which doesn't really right now leave the

best taste in American lives and

households mostly because we're already

dealing with economic challenges as well

as this threat of 80 000 new IRS agents

coming to audit you uh then of course we

have this idea of spending more which

again frustrates many who are frustrated

over this irresponsible spending of the

government especially after covid we

know we overspent during covid that led

to the inflation we have now people were

still dealing with the inflation the

high prices we have now and they're

frustrated they don't want these high

prices anymore of course Democrats

widely argue well now is not the time

for cuts let's get through the economic

catastrophe that we're in and when the

economy is doing better then we'll focus

on paying down the debt but then again

will we the middle ground will probably

be passing the debt ceiling here in some

form of last minute negotiation along

with some form of date manipulation by

the treasury Department and who knows

maybe Parts in the TSA parks and TSA or

congressmen and women won't get paid for

a few days and their paychecks will get

delayed

ultimately I expect this to end up

passing within the next two weeks some

kind of Middle Ground will probably be

actually raising the debt ceiling won't

be a clean bill like Democrats would

want which would mean no restrictions I

expect there would be some restrictions

or new requirements like work

requirements for certain entitlement

programs no military cuts no social

security or Medicare cuts and of course

some cuts to discretionary spending

though a lot of Democrats get frustrated

here because they say Hey you want us to

secure the board or more but border

funding is actually one of the

discretionary fundings so there's always

this constant back and forth with

politics of course a lot of commenters

online will say things like hey who

cares if we default only people who

would care were those or would be those

receiving payments from entitlement

programs and if you're not entitled then

maybe you don't care of course the

counter argument to that is hey if you

lost your job and you're on unemployment

or you're down on your luck and you're

on Medicaid why should you not get paid

when you've been paying into these

systems and all of a sudden the

government failed to uphold their end of

the bargain when they're supposed to

provide a social safety net for you

who knows we'll see but hopefully this

gets passed soon and I expect once this

Catalyst of pain is removed from markets

markets will actually perform quite well

so fingers crossed the debt limit gets

extended if you want more updates make

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we'll see in the next one goodbye