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
Sources to Al Mayadeen: The news regarding a press conference tonight by the head of the Hamas movement in the Gaza Strip, Khalil Al-Hayya, is false.
Lebanese Ministry of Health: One person was martyred in an Israeli drone strike on the outskirts of Nabatieh al-Fawqa
Al Mayadeen's correspondent: The death toll in the al-Bureij camp massacre has risen to 19
Nicolas Maduro: Maria Corina Machado and imperialism wanted to spread violence and chaos so there would be no elections.
Venezuelan President Nicolás Maduro: We were able to neutralize 60 attacks on oil refineries and oil facilities and arrest more than 70 individuals involved.
CNN citing sources: Talks between Washington and Tehran are close to reaching a comprehensive agreement that could be concluded during the next meeting.
US Secretary of State: Washington will begin revoking visas for Chinese students affiliated with the Communist Party or studying in sensitive fields.
Israeli media: Western diplomats: There is a possibility that the US administration will sign an interim agreement or understanding with Iran.
Hamas: We affirm that we are making great efforts to stop the barbaric war on the Gaza Strip.
Hamas: We reached an agreement with Witkoff that includes the flow of aid and a professional committee taking over the management of the Gaza Strip's affairs immediately after the deal is announced.

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

'Israel' concerned US may drop Iran uranium enrichment demand: WSJ

Trump rejects $15mln settlement offer in $20bln Paramount lawsuit

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

US judges quietly consider private security amid Trump tensions

US judges quietly consider private security amid Trump pressures

  • US & Canada
  • 25 May 2025
Rep. Randy Fine, R-Palm Bay, answers a question about his House Bill 3-C: Independent Special Districts in the House of Representatives April 20, 2022, at the Capitol in Tallahassee, Florida (AP/Phil Sears)

GOP lawmaker says Gaza needs same end as WWII Japan, with nukes

  • MENA
  • 23 May 2025
President Donald Trump and Israeli Prime Minister Benjamin Netanyahu arrive to a news conference in the East Room of the White House, Tuesday, Feb. 4, 2025, in Washington (AP)

Rift widens: Trump, Netanyahu clash in heated phone call over Iran

  • Politics
  • 26 May 2025
Iran advisor reveals details of US-Iran nuclear talks to Al Mayadeen

Iran advisor reveals details of US-Iran nuclear talks: Al Mayadeen

  • MENA
  • 24 May 2025

Coverage

All
War on Gaza

Read Next

All
Palestinians cross from the Israeli military Qalandia checkpoint near the West Bank city of Ramallah to occupied al-Quds on Friday, March 14, 2025 (AP)
Politics

Israeli regime arrests martyr Walid Daqqa's wife Sanaa

Spokesperson for the Yemeni Armed Forces, Brigadier General Yahya Saree, announces a new operation against Ben Gurion Airport on May 29, 2025 (Yemeni Military Media)
Politics

Yemen announces successful hypersonic missile strike on Ben Gurion

An Israeli army vehicle moves in the Gaza Strip as seen from southern occupied Palestine, Thursday, May 29, 2025 (AP)
Politics

Hamas rejects Witkoff ceasefire plan, says alters terms: Sources

Iranian Foreign Minister Abbas Araghchi attends a news conference following his meeting with Russian Foreign Minister Sergey Lavrov in Moscow, Russia, Friday, April 18, 2025 (AP)
Politics

Iran denounces media speculation, reaffirms conditions for any US deal

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