Washington US Treasury Secretary Janet Yellen has again urged Congress to raise the US debt ceiling. In an opinion piece in the Wall Stree Journal, Yellen wrote that if the US fails to meet its commitments, it will spark a historic financial crisis. “We would emerge from this crisis as a permanently weakened nation,” Yellen wrote. The creditworthiness of the USA has so far been a strategic advantage.
A crisis caused by the U.S. government default would worsen the economic damage from the ongoing coronavirus pandemic, stir markets and plunge the American economy into recession. Millions of jobs would be lost and interest rates would rise permanently.
Yellen did not mention a point in time for the occurrence of the insolvency in her text. However, it had previously announced that this could threaten as early as October if the Treasury Department had exhausted its payment reserves and extraordinary borrowing capacities within the framework of the $ 28.4 trillion mark.
Republicans in Congress have so far refused to raise or suspend the debt ceiling. House spokeswoman Nancy Pelosi, a Democrat, pointed out that Congress raised the debt ceiling three times during the Trump administration with bipartisan approval. She expects that this will also be the case this time.
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House Democratic leader Jim Clyburn said on Sunday that Democrats may have to push through debt ceiling hikes without Republican support.
More: Debt ceiling: US government warns of default in October