A US debt default would cause “financial and economic chaos,” Treasury Secretary Janet Yellen warned on Sunday, as opposition Republicans still refuse to raise the debt ceiling unconditionally.
The Government of Joe Biden has warned that, if an agreement is not reached on the increase in the debt ceiling, the United States would no longer be able to meet its commitments from the beginning of June, which would put it in a situation of default, a first in the country’s history. For the US finance minister, it would be “an economic and financial disaster,” she told ABC.
A risk of losing 8 million jobs and a drop in GDP of 6%
A ceiling is legally set on the public debt of the United States and can only be raised by a majority vote in Congress. The House of Representatives, in which the Republicans are a majority, approved in late April a bill that establishes a strict framework for public spending in exchange for an increase in the ceiling. But the text has no chance of being adopted, as it is, in the Senate, with a Democratic majority and the US president, Joe Biden, has so far refused to negotiate possible concessions under pressure to remove the specter of a default. However, he invited the four leaders of the two main parties in Congress to the White House on Tuesday to discuss the matter.
“We shouldn’t get to the point of questioning whether or not the president can issue debt,” he said. “It would be a constitutional crisis.” The economic advisers to the head of state believe that if the world’s leading power failed to meet its long-term financial deadlines, it could lose more than 8 million jobs this summer and see its gross domestic product plummet by 6%.
Source: BFM TV
