The Limited Times

Now you can see non-English news...

United States: without raising the debt ceiling, threat of default

2021-07-23T19:52:15.820Z

The US Treasury will need to take "extraordinary measures" to avoid default if the debt ceiling is not raised or ...



The US Treasury will have to take

"extraordinary measures"

to avoid default if the debt ceiling is not raised or suspended by August 2, Treasury Secretary Janet Yellen warned Friday, urging Congress to 'to act.

Read also: United States: "the current level of debt is quite sustainable", according to the Fed

"If Congress has not acted to suspend or increase the debt limit by Monday, August 2, 2021, the Treasury will need to start taking some additional extraordinary measures to prevent the United States from defaulting on its obligations "

threat Janet Yellen in a letter to members of Congress. In August 2019, the debt ceiling was raised by an agreement between former President Donald Trump and elected Democrats in Congress, until July 31, 2021.

After this date, the world's largest economy will no longer be able to borrow money, or risk defaulting, which has never happened and would have disastrous financial consequences.

A "shutdown", the paralysis of federal state services, is also to be feared.

The issuance of local vouchers will be temporarily suspended from July 30.

“Raising or suspending the debt ceiling does not increase public spending nor does it authorize spending for future budget proposals;

it simply allows the Treasury to pay the expenses already adopted, ”

explains Janet Yellen in her letter.

"Irreparable harm"

It specifies that

"the current level of the debt reflects the cumulative effect of all the decisions taken, in matters of expenditure and taxes, by the administrations and the Congresses of the two parties over time"

.

“Failure to meet these obligations would cause irreparable damage to the US economy (...).

The mere threat of not respecting these obligations has had negative effects in the past, including the only downgrading ”

of the country's rating, she recalls.

In 2011, Standard and Poor's caused an explosion by withdrawing in the United States its "AAA" rating, which in principle allowed them to borrow on the markets at minimum cost, sanctioning long months of political blockage on raising the ceiling of the debt.

The subject is recurrent in American political life. Thus, since 1960, Congress has acted 78 times to raise or suspend this debt limit, details the Treasury on its website. The debt of the United States stands at 28.555 billion dollars, according to the site usdebtclock.org.

Source: lefigaro

All business articles on 2021-07-23

You may like

Business 2021-09-09T05:48:24.867Z
News/Politics 2021-08-10T04:53:59.983Z

Trends 24h

Latest

© Communities 2019 - Privacy