US Treasury Secretary Yellen Debt Limit Warning: Act Now
US Treasury Secretary Yellen has written a new letter to US House Speaker Kevin McCarthy on the debt limit.
In the letter in question, Yellen wrote: “I am writing to inform you that as of January 19 it is estimated that the outstanding debt of the United States will reach the legal limit.” he used the phrase.
Recalling that the statutory debt limit was increased to approximately $31.4 trillion on December 16, 2021, Yellen said: “When the limit is reached, Treasury will need to start taking some extraordinary measures to prevent the US from going into breach”. he performed the assessment of it.
Yellen said the debt limit is the total amount of debt the government is allowed to take on to meet its current legal obligations, including Social Security and Medicare subsidies, military salaries, interest on the national debt, tax refunds and other payments.
Emphasizing that it is critical that Congress take timely action to raise or suspend the debt limit, Yellen said, “I urge Congress to take immediate action to preserve the full confidence and reputation of the United States.” he used the phrase.
Yellen also warned that the government’s failure to meet its obligations could cause irreparable damage to the US economy, the livelihoods of all Americans, and global financial stability.
DEBT LIMIT CRISIS
In the US, the federal government is threatened with hitting the $31.4 trillion debt limit, which could lead to default.
The debt limit refers to the upper limit on the amount of money the US government can borrow to pay off its debts.
Technically, the deadline for the debt limit expired on August 1, 2021, while the US Treasury Department began taking “extraordinary measures” so that the government could continue with its payments.
In October 2021, US President Joe Biden approved the bill for a short-term increase in the debt limit, which was designed to prevent the government from defaulting. The bill, which was signed into law with the President’s approval, increased the debt limit by $480 billion. Thus, the debt limit increased from $28.4 trillion to $28.9 trillion.
The country’s debt limit was increased by $2.5 trillion in December 2021, which would suffice until 2023, to $31.4 trillion, and the US was prevented from defaulting. (AA)