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U.S. Treasury Secretary Warns Defaulting On Debt Could Push Global Economy Off A Cliff

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U.S. Treasury Secretary Warns Defaulting On Debt Could Push Global Economy Off A Cliff

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The United States’ trillion debt needs to keep getting bankrolled, else any progress made since the COVID-19 pandemic began will be for naught.

Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell warned US lawmakers that the economy could grind to a halt.

Yellen and Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs about the progress that has been made in bringing the US back from the worst economic downturn since the Great Depression of 1929-1939.

They warned of dire consequences if US Congress didn’t pass a bill to fund the government and raise the country’s debt ceiling in October.

On September 27th, Senate Republicans blocked an emergency spending bill that would avert a government shutdown by October 1 and a federal debt default that is expected in mid to late October.

Such a default could jeopardise confidence in the US dollar as a global reserve currency, Yellen said, and delay Social Security payments, paycheques for military personnel and other government payments that large groups of Americans rely on to make ends meet.

“It is imperative that Congress address the debt limit,” Yellen said in her prepared testimony. “If not, our current estimate is that Treasury will likely exhaust its extraordinary measures by October 18. At that point, we expect Treasury would be left with very limited resources that would be depleted quickly. America would default for the first time in history. The full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession as a result.”

Raising the debt ceiling is “necessary to avert a catastrophic event for our economy”, she added, pointing out that it has been raised or suspended 78 times since 1960 by lawmakers from both of the country’s major political parties.

Powell told lawmakers he agreed with Yellen’s assertion that should the US default on its debt, it would have “devastating” consequences.

“I think it’s essential to raise the debt ceiling in time to avoid payment defaults of any kind, and the potential effects could be severe,” Powell said.

In her testimony, Yellen called the recovery “fragile, but rapid”, while Powell testified that the “path of the economy continues to depend on the course of the virus, and risks to the outlook remain”.

On September 28th, the Conference Board published data which showed US consumer confidence hit a seven-month low in September “as the spread of the Delta variant continued to dampen optimism”, said Lynn Franco, the group’s senior director of economic indicators.

“Concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again,” Franco said in a statement. “Short-term inflation concerns eased somewhat, but remain elevated.”

In their respective testimonies, Yellen and Powell emphasised that the US economic recovery was aided in large part by fiscal policy that helped avert a worse recession, including the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“In response to the crisis, we took broad and forceful measures to support the flow of credit in the economy and to promote the stability of the financial system at the onset of the pandemic,” Powell said in his testimony.

“Our actions, taken together, helped unlock more than $2 trillion of funding to support businesses large and small, non-profits, and state and local governments between April and December of 2020. This, in turn, helped keep organisations from shuttering and put employers in a better position to keep workers on and to hire them back as the recovery continues.”

Yellen and Powell’s appearance on Capitol Hill came at a critical time when Biden and Congressional Democrats are trying to rally support for more government spending in the form of two bills:

  • the $550bn Bipartisan Infrastructure Deal;
  • the Build Back Better Act, multitrillion-dollar legislation that would expand the US’s social safety net.

Urgent voting is needed since if not dealt with the US may go off a cliff and much of the world could follow.

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Séamus

“…..the US may go off a cliff and much of the world could follow.” The psychopathic entity, commonly known as the US, went bankrupt in Feb: 2020. The whole world, with the exception of a couple of vassal lapdogs is waiting for the amoral bully to get is comeuppance, its infrastructure is third-world, its populace are drugged-out, brain dead obese zombies and it’s only a matter of time until it all finally collapses into the awaiting cesspit.

Ahson

brah, all smoke and mirrors. We’s been waiting since the time of baby jesus for this collapse. No luck thus far.

Last edited 17 days ago by Ahson
Marco
Last edited 17 days ago by Marco
Marco

Yes the US is a puppet state ruled by plutocratic pederasts, what you neglect to acknowledge are Russia’s and China’s place among the broader global cabal through various international organizations and global finance.

The belief in a certain threat, real or imagined, is used to consolidate greater political power and establish a stranglehold over the flow of information. Laws are established to punish “thought crime” to hush up certain facts kept under wraps to prevent them from damaging the integrity of the managerial class.

To disagree is to be castigated as none other than a contemporary version of what a “counter-revolutionary” meant to a Marxist-Leninist.
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Corrupt shithole of Ukropisstan

Its already off the cliff.
And has been since 2008.
U.S. has to default sooner or later, they cant print $trillions out of thin air without any backing.
Also would somebody explain why are energy prices skyrocketing?
The world economy is stuttering due to lockdowns and people being sick(from the poison jab), so if the demand is lower than usual why are oil and gas prices soaring?
It should be the exact opposite, low demand low prices, high demand high prices…
It seems someone is trying to crash western production deliberately, creating artificial scarcity.

Last edited 17 days ago by Corrupt shithole of Ukropisstan
Marco

Yet it still stands in spite of Mammonism. China was the first to introduce lockdowns and the poison jab, the first to along with the covid lie. Anyone without multiple jabs is effectively banned from public life and have no social credit standing.

https://ca1lib.org/book/5241885/ade70f

Deuteronomy 15:6
For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you.

Last edited 17 days ago by Marco
The end

Deliberate low reserves. The people in charge of energy sector should be held responsible at the point of a rope.

Michel LeBlanc

Good questions brother. As far as energy prices are concerned, I have a few ideas.

#1 global shipping is in turmoil and backlogged.

#2 Saudi reserves are getting depleted, it wont be mentionned publicly of course, but the insiders all know and try and cash in as much as possible.

#3 could the rise in energy prices be an attempt to increase the costs of chinese industry?

Micheal Hudson call the western economy a rentier economy. Basically our economy is set up to benefit a parasite class at the top, they keep the profit for themselves instead of re investing. We dont produce much finish goods anymore, but property values are soaring. It makes no sens3 unless its to enrich the landlord class.

Cheers!

block

All foreign legitimate nations need to replace the petrodollar ASAP. Then americans can crash and burn, what they have been expecting for decades.

Last edited 17 days ago by block
L du Plessis

May the slavedriver US Gov collapse.

Tommy Jensen

If I were America which I am, I would push the global economy off the cliff.
Why? Because the world owe America what we have been doing for the world, and they have been jumping around to avoid paying America and they have cheated America!
Off the cliff so they can learn it!

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