May 23, 2022

The Queens County Citizen

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United States | Failure to pay will lead to a “historic financial crisis”

United States |  Failure to pay will lead to a "historic financial crisis"

(Washington) US Treasury Secretary Janet Yellen on Sunday called on Congress to raise the debt ceiling in the wake of the “historic financial crisis”.

In an editorial published in Wall Street JournalJanet Yellen recalls that “the United States never failed.”

“It will probably lead to a historic financial crisis […]. The default could be a rise in interest rates, a sharp drop in stock prices and other economic turmoil, “said Finance Minister Joe Biden.

The debt limit, which only Congress has the power to raise, came into force on the 1stIs August.

The United States has banned the issuance of new debts unless the current limit is raised to $ 28.4 trillion.

This recovery is regularly related to political arm wrestling in Congress. Since the 1960s, the debt ceiling has been increased or suspended 80 times.

Last week, the Treasury Department indicated that the United States would run out of money “in the month of October”.

M.To me Yellen explained in his editorial about the cascade of financial disasters if the United States did not increase its debt maturity.

“In just a few days, millions of Americans committed to cash […]. Nearly 50 million seniors will no longer receive their pension checks and soldiers will no longer be paid, ”she wrote.

“We will emerge from this crisis as a vulnerable weak country,” said the Treasury Secretary.

Although the United States has never failed – “not once”, M emphasizesTo me Yellen – recalls her 2011 episode “brought America to the brink of crisis”.

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During the Obama administration, a political stalemate in Congress led to the Standard & Poor’s rating agency withdrawing its “AAA” rating from US debt, causing a shock wave in the markets.

“No more delays” in increasing the creditworthiness of the United States, M addsTo me Yellen. “The last 17 months have tested the economic strength of our country. We are just emerging from the crisis. We must not return to a completely preventable situation,” she concluded.