US Treasury Secretary Janet Yellen has urged Congress to raise the government’s $31.4 trillion debt ceiling to avoid an “unprecedented default.” That, he said, would undermine America’s economic leadership and cause a global economic downturn.
“A bankruptcy would threaten the progress we’ve made, which we’ve worked so hard on in recent years while recovering from the pandemic. And it would cause a global recession that would push us further back,” Yellen said at the G7 summit in Japan. There is also the question of whether the US can still defend its national security interests.
The debt ceiling is the maximum amount of debt the US government can legally take on. President Joe Biden wants Republicans, who hold the majority in the House of Representatives, to agree to raise the debt ceiling without additional conditions. Economists believe that if the ceiling is not raised, the treasury will run out of money in a few months.
As the debt ceiling is reached, political trench warfare is about to begin
America has hit its debt ceiling. The first major battle between the White House and Republicans in Congress begins.
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