The Secretary of the Treasury, Janet Yellen, expressed her concern about the financial situation of the United States, since she believes that the economy would enter a recession if Congress does not address the issue of the public debt limit before it occurs a default of payments.
Janet Yellen expressed in an interview with CNBC that in her opinion the issue should be resolved no later than 18 October In this sense, the secretary stated that “it would be catastrophic not to pay the bills.” He acknowledged that not having certainty on the subject places the Treasury in a position in which they would lack the financing to pay them debts .
Falling into defaults would cause financial chaos in the United States and the entire production chain, for this reason, President Joe Biden asked, yesterday, Congress to increase the debt limit this week and avoid even approaching an almost certain economic crisis.
The president openly blamed the Republicans and the minority leader of the Senate, Mitch McConnell, for intervening to give certainty to the law that would allow increasing the limit on loans.
The Department of the Treasury is using the extraordinary emergency measures to pay US revenue since hitting the last debt ceiling in late July. The extraordinary measures allow the department to conserve cash and withdraw certain accounts without issuing new bonds.
According to Treasury estimates, the measures are temporary and will only last until mid-October. Until now, the United States has not stopped paying its commitments, but experts argue that a default would cause widespread damage through an increase in interest rates .
If the payments of the debts are not fulfilled, the government could delay the issuance of the Social Security checks, which benefit 50 millions of older adults. This could put the family economies of this sector of the population in serious trouble, which, in many cases, do not have another income to survive.
The legislators of the two parliamentary groups existing in the Congress, Senate and House of Representatives have admitted that the debt ceiling must be increased or there is a risk of an economic collapse of enormous dimensions. Despite this, neither the Democrats nor the Republicans have reached an agreement despite the dangers looming on the horizon for the country.
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