US Default Will Lead To Jobs And Benefits Loss, According To Yellen
Janet Yellen issued a warning to the county leaders about what could happen if the United States of America defaults on its payment obligations. According to her, this will make the residents of the county lose their jobs and even the benefit payments from the federal government.
All of this is coming at a time when congress has to approve a new debt ceiling for the USA. But if congress fails to raise the debt ceiling on time, this could increase the chances of the USA defaulting on its loans.
Fed Can Maange Till Early June 2023
According to Yellen, the USA can pay for all of its obligations till early June 2023. But for that to happen, the Fed will have to use some strict cash management measures.
She also made it clear that both the economists and her own assessments point towards a major financial & economic catastrophe if the debt ceiling is not raised. She also stressed the point of how people could lose their jobs as well!
For now, the house of representatives is controlled by the Republicans who are demanding concessions on spending from the President. In exchange, they are willing to increase the debt ceiling of the country.
However, Biden is not that interested in negotiating the debt ceiling issues with the other parties. According to him, this issue is related to past spending decisions.
And the thing which makes the matter worse is that republicans mostly rely on small donors for their fundraisers. As a result, even the business lobby groups can't pressurize them over the debt ceiling issue!
Yellen also pointed out how the USA has been paying its bills since 1789, and it would be best if it could stay that way!
But if we look at the past, it appears that the chances of a default in the USA are very low. After some tough back-and-forth negotiations, the debt ceiling will be raised eventually.