Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Israeli media, citing the occupation army: We tried to "eliminate" Hamas spokesperson Abu Obeida
Al-Mashat: I call on everyone worldwide to avoid dealing with any assets of the entity, and there is still an opportunity for settlers to return to their countries
Al-Mashat: A final warning to all companies in the occupation entity to leave before it’s too late
The Israeli occupation army carries out a deadly airstrike on a populated residential building in the densely populated al-Rimal neighborhood, west of Gaza City, resulting in dozens of fatalities and injuries: Al Mayadeen's correspondent
Al-Mashat: We say to Gaza, we stand firm regarding our stance, no matter the sacrifices
Al-Mashat: We will meet challenge with challenge, and you will no longer have any sense of security
Al-Mashat: We say to the Zionists, our revenge is unyielding, and dark days await you
Al-Mashat: We will take revenge, and we will come out victorious from the depths of our wounds
Al-Mashat: Our people are capable of overcoming all difficulties and challenges, and the enemy will not be able to break our steadfastness, nor will we be intimidated by raids or terrified by threats
President of the Yemeni Supreme Political Council Mahdi al-Mashat: The Government of Change and Building will carry out its duties in a caretaker capacity, and the blood of the martyrs will serve as a motivation for steadfastness and reconstruction

US debt default would trigger 'economic catastrophe': Yellen

  • By Al Mayadeen English
  • Source: Agencies
  • 25 Apr 2023 23:48
  • 1 Shares
4 Min Read

The US Treasury Secretary warns Congress not to leave the decision on raising the debt ceiling until the last minute.

  • x
  • A US debt default would trigger 'economic catastrophe': Yellen
    US Treasury Secretary Janet Yellen during a US House Committee on Financial Services hearing on the Annual Report of the Financial Stability Oversight Council, on Capitol Hill in Washington, DC, May 12, 2022 (Reuters)

US Treasury Secretary Janet Yellen warned on Tuesday that a US default on its debt would set off an "economic and financial catastrophe," stressing that Congress must not wait until the last minute to make a decision on the matter.

Yellen added that the decision to raise the debt ceiling or suspend it should be "without conditions".

The fight over the debt ceiling has become an annual tradition in Congress between the ruling party (presently the Democratic Party with Janet Yellen being one of its office bearers) and the opposition (presently the Republicans most prominent among which is McCarthy the speaker of the house).

Her remarks come ahead of an anticipated vote this week, organized by McCarthy, on lifting the debt ceiling and reducing spending. The vote comes contrary to US President Joe Biden's calls to unconditionally increase borrowing.

Read more: McCarthy calls Biden 'irresponsible' for refusal to put state debt cap

Biden is advocating for a "clean" lifting of the US borrowing limit, claiming that the deficit spending has already been approved by Congress and is thus not subject to debate.

In January, after the US maxed out its borrowing limit at $31.46 trillion, the US Treasury announced launching "extraordinary measures" to prevent defaulting on debt. Yellen then decided that the Treasury would temporarily suspend payments that aren't urgent and divert the money for more pressing needs i.e. services needed to keep the government operating. 

The Congressional Budget Office (CBO) warned in February that the government could exhaust its funds by July - the final date to decide on the matter - leading to a default on American debt unless Congress raises the current debt ceiling.

Related News

US bars Abbas, PA officials from UN summit, sparks EU backlash

US senators demand 'massive surge' of baby formula for Gaza infants

Read more: US Fed Reserve official says monthly hikes may no longer be needed

"In my assessment –- and that of economists across the board –- a default on our debt would produce an economic and financial catastrophe," Yellen said on Tuesday.

Failing to see through the crucial decision could mean higher payments on car loans, mortgages, and credit card rates, while businesses could be hit with a credit crunch. The US government could fail to release social security payments, bondholders' dues, and military wages, which would directly impact millions of American citizens.

"This economic catastrophe is preventable," she said. 

"The solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions. And it should not wait until the last minute," she added.

In the long run, a default also means that the government's borrowing costs would increase permanently and future government projects would become much more expensive.

The plan proposed by Republican House Speaker Kevin McCarthy to raise the US debt ceiling in exchange for cuts in government spending was criticized on Monday by Moody's Analytics, who claim the plan would slow growth and cut employment.

The agency argued that if the draft presented by McCarthy on April 17 was passed as is, it would lead to a drop of 0.6 percentage points in US potential growth in 2024 and the elimination of 780,000 jobs.

Addressing other issues on Tuesday, Yellen said the Biden administration's top economic priority is to tackle inflation while safeguarding gains of the last two years.

In comparison to a scenario in which a new ceiling was approved without conditions, unemployment would reach 4.6 percent in March 2024, up from 3.5 percent in March 2023.

  • United States
  • debt ceiling
  • US
  • Kevin McCarthy
  • Janet Yellen
  • Joe Biden

Most Read

Fierce resistance ambushes target IOF in Gaza Strip

Fierce resistance ambushes target IOF in al-Zaytoun, Gaza City

  • Politics
  • Today
Tom Barrack's imperial tantrum in Beirut: When entitlement speaks (Photo by Mahdi Rtail)

Tom Barrack's imperial tantrum in Beirut: When entitlement speaks

  • Politics
  • 26 Aug 2025
Although it does seem likely they will launch some kind of operation in northern Gaza, one which will accelerate its mass murder of civilians, but will fail to achieve its stated objectives. (Al Mayadeen English; Illustrated by Batoul Chamas)

Here is why the Israeli occupation of Gaza won’t work

  • Opinion
  • 26 Aug 2025
A scene showing an al-Qassam Brigades fighter during an ambush on July 7, 2025, in a video released by the al-Qassam Brigades on August 26, 2025 (al-Qassam Brigades Military Media)

Al-Qassam reveals Beit Hanoun ambush targeting Israeli forces

  • Politics
  • 26 Aug 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
Iran slams E3 snapback bid, backs Russia-China nuclear plan
Politics

Iran slams E3 snapback bid, backs Russia-China nuclear plan

Palestinian President Mahmoud Abbas addresses the 77th session of the United Nations General Assembly on Sept. 23, 2022, at the U.N. headquarters. (AP)
Politics

France slams US over Palestinian Authority visa ban to UN summit

IRGC foils Mossad plot, captures 8 in Mashhad
Politics

IRGC foils Mossad plot, captures 8 in Mashhad

Piyush Goyal in an undated photo (Sajjad Hussain/AFP/Getty Images)
Politics

India will not 'bow down' to pressure: Trade Minister

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS