US Treasury Secretary Jannet Yellen has recently warned that the country risks a debt default. In testimony to Congress, Yellen said defaulting on US debt obligations would be “unthinkable” and “would have absolutely catastrophic economic consequences.”
To sound even more credible, the Treasury Secretary has also written an official letter to Congress.
A default on payment obligations “would cause irreparable harm to the US economy and the livelihoods of all Americans,” Yellen said in a statement, emphasizing the damage that even the threat of a default could have on the economy.
If lawmakers do not raise the debt ceiling or do not limit borrowings, the US will reach the highest level of public debt as early as August 1. If measures are not taken by October 1, when a new fiscal year starts in the US, the government will face challenges in paying off its obligations as massive expenditures are scheduled for this period. In other words, the government should take immediate and decisive actions.
