US Treasury Secretary Janet Yellen called on Congress to raise the debt ceiling to avoid a "historic financial crisis and a list of potential financial catastrophes for the country."
"The United States has always raised the debt ceiling before it exceeded its maximum," Yellen said in an article published in the Wall Street Journal, noting that Washington "never, not once, defaulted."
"A default would likely cause a 'historic financial crisis', revealing that a default could lead to higher interest rates, sharply lower stock prices and other financial turmoil as the debt ceiling that can only be re-enforced by Congress," she added. Its increase on August 1, after it was suspended for two years, as the current debt ceiling prohibits, unless raised, the United States from borrowing more than the current ceiling of 28.4 trillion dollars.
Yellen pointed to a "list of potential financial catastrophes that could inflict the country" if the debt ceiling was not raised and the United States was unable to pay its debts within the specified deadlines, explaining that "within days millions of Americans will be short of cash" and that "Social Security checks may have It cuts off about 50 million elderly people, soldiers’ salaries may stop, and the United States will emerge from this crisis as a weaker nation.”
The US Treasury Secretary recalled the debt crisis of 2011, noting that “the policy of putting the United States on the edge of the debt ceiling pushed America to the brink of a crisis,” considering that “moving as quickly as possible will enable the country to avoid the worst results that the year 2011 witnessed.”
"Time means money, in this case, billions of dollars, and neither delay nor default can be tolerated. The last 17 months have tested our country's economic strength. We are just emerging from the crisis and we must not completely immerse ourselves again in another avoidable crisis."
The US Treasury warned last week that US government funds will run out in October.