In one of her latest efforts to urge Congress to come up with a solution for the United States debt problem, US Treasury Secretary Janet Yellen said that if the U.S. government fails to avoid a default, the ability of the government to provide worldwide leadership and defend the homeland would be undermined.
Overview
While attending the G-7 gathering in Japan, Yellen once again that if the United States takes a default, it would be an “economic and financial catastrophe”. She al
so went on to say that taking a default would “spark a global downturn” and also puts the worldwide economic leadership of the United States at great risk. Yellen then addressed one final category regarding national security, stating that taking a default would also raise questions about how ready America is to defend its national security interests.
No Progress Being Made
President Joe Biden held a meeting with Republican members of Congress last week to come up with a solution, but little progress was made at finding a solution as the two sides could not come to any sort of agreement. However, another meeting regarding the budget is scheduled to take place on Friday between the President and U.S. lawmakers.
Yellen Wants Debt Ceiling Removed
At the G-7 gathering, Janet Yellen was questioned by reporters about a long-term fix to the United States debt problem. The treasury secretary then went on to suggest that the country gets rid of setting a cap on government borrowing altogether. “Personally, I think we should find a different system for deciding on fiscal policy,” she said. “Congress could repeal a debt ceiling or handle it differently.”
Wrap Up
The two political parties in the United States are in a stalemate when it comes to finding a solution to this problem. Some members of Congress want the president to promise spending cuts in order to approve raising the debt ceiling. Others don’t agree, however, saying the ceiling should be raised and budget cuts talked about after the raise. In the United States, members of the economy are patiently waiting to see what move will be made.