A debt default of the United States would unleash an “economic and financial catastrophe,” Treasury Secretary J.anet yellen.
The official emphasized in remarks prepared for an event in Washington that an increase or suspension of the US debt limit – a necessary step to avoid a default – should be given “without conditions” by Congress.
The Republican opposition demands a drastic cut in public spending to proceed to increase this debt issuance ceiling.
Republicans intend to push for a vote this week on this issue.
The United States reached its debt limit of 31.4 trillion dollars in January, which led the Treasury Department to take extraordinary measures that allow it to continue financing government activities.
But if Congress does not raise or suspend the debt ceiling Before current tools run out, the Biden administration risks defaulting on payment obligations starting in July, with profound effects for the US and global economy.
“In my assessment, and that of economists in general, a default on our debt would produce an economic and financial catastrophe,” Yellen said Tuesday.
Yellen warns that if a defaultMortgage, car loan and credit card payments will rise, while businesses could see credit conditions worsen.
The federal government could also become unable to make payments to millions of Americans, including those who rely on Social Security.
