Wednesday, December 08, 2021

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United States close to defaulting on its debt

United States close to defaulting on its debt

Washington, Sep 20 (Prensa Latina) The United States is close to defaulting on its public debt, something that expert assessments assure could unleash an economic catastrophe on a global scale.
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The topic was examined in a lengthy article published in The Hill newspaper, according to which Democrats and Republicans are locked in a high-risk battle over the federal debt ceiling, with the United States on track to default in early October.

According to The Hill, the debt ceiling is the legal cap on the amount of money that the federal government can owe to the many foreign individuals, businesses, financial institutions, and nations that own the country’s debt obligations through US Treasury bonds.

Once the country reaches the debt limit, the Treasury is no longer authorized to issue new bonds and must take ‘extraordinary measures’ until the president signs a bill raising or suspending the limit, something that could happen this week.

The $28.5 trillion debt limit was reimposed on August 1st when a two-year suspension included in a 2019 budget deal signed by then-President Trump expired.

The newspaper stated that the Secretary of the Treasury, Janet Yellen, warned legislators that the department could run out of means to avoid a default next month. This situation of apparent crisis is taking place amid recriminations from the Republicans, who argue that the Democrats are solely responsible for raising the debt ceiling after passing a stimulus bill of 1.9 trillion dollars in March, according to party lines.

Democrats are also rushing to pass a multi-trillion-dollar infrastructure, climate and social services bill before the end of the month that could fix the debt problem.

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