United States: Yellen urges Congress to raise debt ceiling

US Treasury Secretary Janet Yellen on Monday urged congressional officials to act

to raise the debt ceiling, and allow the United States to honor its financial commitments and avoid default.

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"I respectfully urge Congress to protect the full confidence and credibility of the United States by acting as soon as possible,"

Janet Yellen urged in a letter to elected officials of Congress as the debt ceiling is back in effect since Sunday, after two years of suspension. To honor its commitments and finance its expenses as well as the laws already adopted by Congress, the country issues government bonds, which it repays when they fall due. However, when the debt ceiling is reached, the country can no longer finance itself by borrowing and must use the funds at its disposal.

Janet Yellen has thus announced the implementation of certain

, aimed at suspending certain expenses, as she had already communicated to elected officials in a previous letter of July 23.

But according to some economists, this will only offer a respite of a few weeks before the default.

The measures

, thus calculated Nancy Vanden Houten, of Oxford Economics, in a note published Monday morning.

78 congress speeches

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 ceiling was suspended in August 2019, until July 31, 2021, thanks to an agreement reached between the Trump administration and Congress. Back in force on August 1, the debt was reset to Friday's amount, just over $ 28 trillion, according to Treasury figures.

The US debt and deficit soared during the Covid-19 pandemic as the government adopted three massive spending plans in the face of the economic crisis. A default by the United States would also trigger a financial explosion. In 2011, the rating agency Standard and Poor's had withdrawn its “AAA” rating from the country, which in principle allowed them to borrow on the markets at minimum cost, sanctioning long months of political blockage on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.