Twice a year, the media announces that the US national debt has hit the ceiling and the government should take measures to avoid a default. As a rule, the authorities raise the debt ceiling and the saga continues. Treasury Secretary Janet Yellen reaffirmed June 1 as the “hard deadline” for the US to raise the debt ceiling. “I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1,” Yellen pinpointed. It may sound impressive, but it is a routine formal letter to Congress about the timing and amount of borrowing. Based on that letter, Congress will decide whether to raise the ceiling. “These estimates are based on currently available data, and federal receipts, outlays, and debt could vary from these estimates. The actual date Treasury exhausts extraordinary measures could be a number of days or weeks later than these estimates,” the letter reads. If Congress fails to take timely measures, this may damage business and consumer confidence, increase the cost of short-term loans, and crash the US credit rating. Meanwhile, the US national debt stands at $31.4 trillion. Apparently, it remains to wait for Congress to approve a new debt ceiling and forget all this until the next time.
