The talks have focused on a two-year spending deal that would raise the debt ceiling simultaneously, extending it past the 2024 election. However, there is still disagreement over how much to cut spending and whether to increase work requirements for government benefit programs.
If no deal is reached by the end of next week, the government could default on its debt, devastatingly impacting the economy.
A default would lead to higher interest rates, making it more expensive for businesses to borrow money and invest. It would also lead to a decline in the dollar's value, making imports more expensive and exports less competitive.
A default would have a significant impact on businesses of all sizes. It would make it more expensive to borrow money, which would reduce investment and hiring. It would also lead to declining consumer confidence, which would hurt sales.
CEOs should take steps to mitigate the impact of a default, such as:
- Building up cash reserves. This will allow businesses to weather the storm if a default occurs.
- They are reducing debt. This will make it less likely that businesses will be forced to default on their loans if interest rates rise.
- They are hiring a financial advisor. A financial advisor can help businesses develop a plan to mitigate the impact of a default.
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