This is a multi-billion dollar problem that plagues investors around the world.
Will the United States be able to agree on an increase? debt ceiling The battle between the Democratic Joe Biden administration and the Republicans who control the House of Representatives.
Days pass and similar statements return from Washington. No agreement has yet been reached. But both sides have promised to reach an agreement, accusing each other of making unacceptable demands.
Biden and House Speaker Kevin McCarthy will meet in person on May 22 to break the deadlock.
The problem is that time is ticking and the US is one step closer to default. Without Republican-Democratic deal on debt ceiling hike, US could plunge into nightmare default as early as June 1, Treasury Secretary Janet Yellen warns of widespread ‘economic chaos’ I warn you that it is possible.
i don’t have money to pay the bill
Mr. Yellen sounded the alarm again. The U.S. may no longer be able to pay its bills if the debt ceiling is not raised by June 1, she said.
“There is always uncertainty about tax revenues and expenditures,” Yellen said on NBC’s “Meet the Press” on May 21. , in my assessment, is likely to be reached by June 15.” Being able to pay all the bills is pretty low. “
Tax payment is due in mid-June. The bill is the federal government’s public expenditure, which includes salaries of civil servants, social security, and repayment of creditors.
“There was a lot of taxes on June 15,” Yellen continued. “But by early June, I interpret that to be earlier than that, and that date will be very difficult to come by.”
Yellen said continued conflict would force the federal government to make “hard choices” about which bills would go unpaid if the debt ceiling was not raised.
“We are committed to raising the debt ceiling, but if that doesn’t happen, there will be difficult choices to make,” he said. There can be no acceptable results,” he said. “
A higher debt ceiling is necessary for the government to meet spending commitments already approved by Congress and the President to prevent defaults. No new spending is allowed, but House Republicans have said they won’t raise the debt ceiling without a deal on future spending cuts.
of Ministry of Finance has been using accounting tricks since the beginning of the year to delay the passing date as long as possible, but the room for maneuver is shrinking.
Biden vs. McCarthy
A default could put more than 7 million Americans out of work and evaporate $10 trillion in household wealth, according to a Moody’s Analytics report.
To raise the debt ceiling, Republicans are demanding drastic cuts to the federal government that cut public spending by $130 billion. According to President Joe Biden, it is an “unacceptable” and “extreme” proposal that threatens to appeal to the 14th Amendment to the US Constitution to avoid a default. The amendment establishes the “effectiveness of the public debt of the United States.” […] would not be asked. “
But Yellen is skeptical of such a process. For her, the 14th Amendment “cannot be properly used in these circumstances given the legal uncertainty surrounding it and the tight deadlines we face.” .
In a video released just before the G7 summit, Biden warned that a U.S. debt default would be “devastating” and “devastating for the United States and, frankly, the entire world.”
McCarthy told reporters on May 21 that he planned to speak to Biden “within the next hour,” adding that he was happy to have the president back in the United States.
“I think he has to step away from the socialist side of the Democratic Party and represent the United States, which means both sides have to compromise,” McCarthy said. “I’ve been there all along.” rice field.
https://www.thestreet.com/politics/yellen-says-america-may-not-pay-its-bills Yellen says America may not pay bills