US Secretary of Treasury Demands Raising Debt Ceiling to Avoid "Catastrophe"
US Treasury Secretary Janet Yellen calls on Congress to raise the debt ceiling to avoid a "historic financial crisis."
In an editorial published by the Wall Street Journal, US Treasury Secretary Janet Yellen called on Congress to raise the debt ceiling, noting that the US has always raised it before exceeding the limit and that it has "never defaulted, not once". If the US were to default, then this, according to Yellen, would trigger a sharp rise in interest rates, a steep drop in stock prices, and "other financial turmoil," she explained.
In the op-ed, Yellen listed a number of potential financial catastrophes that may hit the country if the debt ceiling is not raised and the US could not meet its financial deadlines:
- In a matter of days, millions of Americans could be strapped for cash.
- Nearly 50 million seniors could stop receiving Social Security checks for a time.
- Troops could go unpaid.
- The Americans would emerge from this crisis a permanently weaker nation.
The debt limit, which only Congress can increase, had been suspended for 2 years. It was again enforced on August 1 and currently prohibits the US from borrowing more than $28.4 trillion. It has been increased close to 80 times since the 1960s.
Last week, the US Treasury said that the United States would run out of money sometime in October.