US is on the verge of witnessing a recession if they miss a payment on 18th October
Biden administration recently called Congress for raising the debt limit for this week and dodge any approaching short-sighted economic turmoil
Treasury Secretary Janet Yellen stated that she believes the U.S. economy could fall into a recession if the Congress doesn’t address and update the borrowing limits for the federal government ahead of an unprecedented default that could arise on the U.S. debt. She stated that October 18 is the deadline. It could get catastrophic to not pay any of the government’s debt, for us being in a situation where the federal government lacks all the necessary resources to pay their bills. The Biden administration recently called Congress for raising the debt limit for this week and dodge any approaching short-sighted economic turmoil. The President laid blames on the Senate Minority Leader and the Republicans, for standing in front of legislation that could lift the borrowing via a filibuster.
The Treasury secretary has been issuing its warnings to House Speaker and Senate Majority Leader, that the U.S. would no longer be able to honor all of its debts around October 18. Lawmakers would then have to suspend the debt ceiling before the desired date or it could lead to first-ever U.S. default. The Treasury Department is presently leveraging the so-called emergency extraordinary measures for paying down the U.S. receipts in reaching the last debt ceiling for the end of July. Extraordinary measures enable the department for conserving as well as withdrawing down some accounts without having the need to issue newer bonds. However, these measures happen to be temporary and are only forecasted to be able to endure pressure until mid-October.
While the U.S. has never missed a payment for its bills, economists have been stating that a default could end up sparking a widespread damage via a soaring hike in the interest rates, declining faith in U.S. for its ability to meet future obligations on maturity time and potentially delaying any of the Social Security checks for some 50 million older adults. The members of the U.S. armed services could also witness a delay in their payments as a result of this default.