.USTreasury SecYellen warned that the US defaulting on its debt would be catastrophic for the economy. Millions who rely on federal government payments would go unpaid, ranging from 66 million Social Security beneficiaries to veterans, Yellen said.
Yellen, delivering remarks before Independent Community Bankers of America in Washington, D.C., spent a good portion of her speech focused not only on the need for lawmakers to raise the debt ceiling but also on the consequences of if a deal between President Joe Biden and Republicans isn’t inked before the fast-approaching “X Date” — that is the point at which the Treasury cannot pay all incoming bills on time and in full.
She also warned a default could plunge the U.S. and the world into a financial crisis. Defaulting would upend a fundamental principle in modern finance — that the U.S. always pays the principal and interest on its bonds in full and on time, Yellen said. She noted that the White House Council of Economic Advisers charted out the economic effects of a protracted default scenario. The council found that a default would lead to an economic downturn as bad as the Great Recession, with over 8 million people losing their jobs. The entire value of the stock market could be shredded by an enormous 45%.CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
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