Treasury Secretary Janet Yellen has issued a stark warning to Congress, emphasizing that the United States is on the brink of defaulting on its debts if the debt ceiling is not raised. The consequences of such an event would be catastrophic, with far-reaching impacts on the economy and global financial markets.
The Treasury Secretary, Janet Yellen, has issued a warning to Congress regarding the debt limit. In a statement, she emphasized that the United States is at risk of defaulting on its debts if the debt ceiling is not raised.
Consequences of Default
Defaulting on debts would have severe consequences for the economy and global financial markets. It could lead to a loss of confidence in the US dollar, causing interest rates to rise and making it more expensive for businesses and individuals to borrow money. This, in turn, could lead to a recession.
Impact on Social Security and Medicare
The debt limit warning also highlights the potential impact on social security and medicare benefits. If the debt ceiling is not raised, these programs may be forced to reduce their payments or even cease operations altogether.
Congress Must Act
Secretary Yellen has urged Congress to take immediate action to raise the debt limit. She emphasized that this is not a partisan issue but rather a matter of responsible governance. The Treasury Department will continue to monitor the situation closely and work with lawmakers to find a solution.
Timeline for Action
The debt ceiling must be raised before June 5th, when the Treasury Department’s cash reserves are expected to run out. If no action is taken, it could lead to a default on US debts. The consequences of such an event would be severe and far-reaching.
