On the edge of the abyss, the US Treasury has an extremely short deadline to avoid falling into a black hole.
On Friday, January 13, Janet Yellen, the national Treasury Secretary, said the government has to do something extraordinary to settle the debts that are currently piled up.
The deadline for the Treasury to put the house in order is until next Thursday, December 19. This issue is now a priority and is on the agenda in Congress.
Action Must Be Taken
Congressional leaders will probably discuss measures to increase the state’s debt limit.
Republicans say they would rather fight for government spending cuts. Since they’re in the majority now, they’re going to go against the tricks of the Biden administration and try to do that.
Karine Jean-Pierre, a White House spokeswoman, said the Biden administration will negotiate absolutely nothing and isn’t going to accept GOP cuts.
Unfortunately, those who will pay the debt will be the least privileged, as it is likely to cut into retirement funds. Doing this would be a desperate move, but it wouldn’t solve the whole problem itself.
According to Yellen, failure to meet government obligations could culminate in an irreparable wave that would hit the U.S. economy and also create instability in the global economy.
This is a red alert for the battle that is about to begin. The Biden administration’s inability to manage its debts is notorious; the spending has been incredibly excessive.
Then again, Congress always does the same thing and raises the debt limit, buying the Treasury’s debt as the Fed plays along; so what else is really new?
Fake debt limit drama in Washington DC. 🤮
1) Congress will always raise the debt limit
2) The US Treasury will always sell more debt.
3) The Fed will always be there to print the money to fund their deficits.
— Wall Street Silver (@WallStreetSilv) January 13, 2023
What Do Republicans Want?
On the other hand, the Republican caucus pushed for order to be established and for the government to pay its debts. Kevin McCarthy, says he’s putting his foot down as House Speaker.
The Republican Party hopes he will be the speaker of the House and he can fairly coordinate all the measures that are to come.
The current limit of the U.S. Treasury debt is $31.4 trillion. The consequences of non-payment of debt can cause major problems in the local economy and the world.
Stock exchanges around the world are also in danger; you could see stocks plummet in fractions of seconds and with that, an economic apocalypse.
US Treasury Secretary Janet Yellen said the United States will likely hit the $31.4 trillion statutory debt limit on January 19, forcing the Treasury to launch extraordinary "cash management measures" that can likely prevent default until early June. pic.twitter.com/WgHQejqnR2
— Arth Ben (@ArthurBenta) January 14, 2023
The Bottom Line
Economic experts and analysts say the world economy risks collapsing even if the U.S. continues this debt game indefinitely.
Ellkiot Hentoy, head of policy research at State Street Global Advisors, said he was extremely apprehensive about the current Treasury debt.
For him, it wasn’t always an easy question to deal with. However, there was always a possible way out to deal with the issue.
Though now, you can’t even see a light at the end of the tunnel and there’s no doubt this needs to be taken more seriously.This article appeared in FreshOffThePress and has been published here with permission.