The United States economy won’t default on its debt until December 3rd but Treasury Secretary Janet Yellen is saying that is not good enough. Last week congress raised the debt ceiling nearly 480 billion dollars to keep the Federal Government funded until December 3rd.
Earlier this week Treasury Secretary Janet Yellen issued a letter to congressional leaders saying while she is going to use the 480 billion dollars it will be for “extraordinary measures” only.
When the United States Treasury needs to take “extraordinary measures” to keep us from defaulting it is a dicey situation that makes the United States economy shaky and could scare investors.
When the debt ceiling is raised it only allows us to pay our bills that Democrats and Republicans have racked up in a bipartisan manner over the years. In the letter Secretary Yellen says the bills are due and whether we like it or not it is a fact of life to pay our bills.
Defaulting on the United States debt has never happened before but if it does happen it will have some serious consequences that will affect our everyday life.
Some of these consequences include:
- The United States government would not be able to pay salary or benefits for federal employees or military members retires and contractors.
- Social security.
- Medicare.
- Medical benefits would stop.
- Tax refunds.
- Child Tax Credit.
- Student loan payments.
- Payments to keep all government facilities open.
- Interest rates would increase.
- Increase cost for corporations and small businesses.
- State and local governments funding.
- Credit card interest rates would increase.
- Mortgage rates would increase.
- Car loan rates would also increase.
- Retirement plans would take a financial hit.
- And the cost of importing goods would skyrocket.
From all those things that are listed it would also cause massive unemployment rates to increase again and a freeze of gross domestic products.
Treasury Secretary Janet Yellen has made it clear since the beginning of the summer that it is imperative for congress to raise or suspend the debt ceiling. If congress will do that or not is anyone's guess right now.
