US default will produce ‘chaos’: Yellen’s dire warning

US Treasury Secretary Janet Yellen warned Sunday that unless Congress acts soon to raise the country’s debt limit, financial and economic chaos will ensue with implications around the world.* 100002* googletag.cmd.push(function() { googletag.display(‘div-gpt-ad-1629474421914-0’); });

(What can happen if the United States goes into financial default).

The government of Democrat Joe Biden has said that if an agreement is not reached, the United States will not be able to meet its obligations as of June 1, which for the first time in history it would put the country in default.

“It is simply unacceptable for Congress to threaten economic calamity for American households and the global financial system like the cost of raising the debt ceiling,” Yellen declared. to ABC.

The public debt ceiling of United States can only be increased by passage of legislation of Congress signed into law by the President.

The House The Republican-led House of Representatives voted in late April to raise the debt limit, but only with drastic cuts to rein in what the party sees as excessive spending.

(Continuing the US banking crisis) .

But the text has no chance of being adopted as it is in the Senate with a Democratic majority. So far, Biden, has refused to negotiate potential concessions under pressure to remove the specter of a default, pointing out that the debt ceiling has been routinely raised dozens of times, even under the former president Republican Donald Trump.

However, he invited the four leaders of the two main parties in Congress to the White House on Tuesday to discuss the matter.

I know he wants to establish a process where priorities and spending levels are discussed, Yellen said, but these negotiations should not be conducted with a gun pointed at the head of the American people.

Yellen deflected questions about the possibility that Biden unilaterally authorize more loans by invoking Amendment 14 to the Constitution, which establishes that the validity of the public debt of the United States (…) should not be questioned.

(Despite the fact that inflation subsides, the Fed raised its rate again).

We shouldn’t get to the point of questioning whether or not the president can issue debt, he said. It would be a constitutional crisis.

Economic advisers to the head of state believe that if the world’s leading power failed to meet its long-term financial deadlines, it could lose more than eight million jobs this summer and see its GDP plummeting 6%.

Since the United States hit its debt limit of $31.4 trillion in January, the Treasury has taken extraordinary steps to continue funding the federal government. But as Yellen warned last Monday, those measures will soon run out.


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