Extreme confrontation continues between the ruling and opposition parties over the government debt limit
Sutured until June… It seems that compromise is more difficult because of internal conflict in the Republican Party
U.S. Treasury Secretary Janet Yellen has warned every day of the possibility of a national bankruptcy in her country.
This is because of the observation that the default (debt default) crisis caused by the US-specific system of putting a ceiling on government debt has been resolved every time, but this time it may be different.
Secretary Yellen tweeted on the 21st (local time), “The United States has always paid off all its debts since 1789, and the recognition that we are a nation that we can trust and rely on in that way has underpinned the global financial system.” “The default will cause widespread damage to the US economy,” he said.
Secretary Yellen’s remarks on the day came as the total debt of the US federal government reached the limit set by law on the 19th.
The debt ceiling was set by Congress to limit the amount of money the US government might borrow, and the current debt ceiling is $31.4 trillion (approximately 3 trillion 8779 trillion won).
If the US Congress does not raise the debt ceiling, a default, in other words, a US national default will occur.
Republicans, who have a majority in the House, are currently refusing to raise the debt ceiling, citing government spending cuts as prerequisites.
The U.S. Treasury Department entered into special measures on the 19th to avoid default, such as deferring new payments for federal civil servant retirement and disability pension (CSRDF), but this only buys time until June and is far from a fundamental solution.
In response, Minister Yellen is warning every day that the possibility of US default might lead to a global financial crisis.
“This will undermine the dollar’s role as a key currency,” Yellen said the day before.
He also sent a letter to the Senate and House leadership on the 13th, urging them to raise the debt ceiling.
According to Newsweek, the U.S. Congress raised the debt ceiling a total of 22 times between 1997 and 2022, and there has been no default.
However, looking at the current conflict between the ruling and opposition parties in the United States, the prospects are not bright.
The White House is asking Congress to raise the debt ceiling without conditions such as government spending cuts, so the prospects for negotiations between the White House and Republicans are not bright.
The fact that the Republican House leadership’s negotiating space is not large is also cited as a factor hindering negotiations, as Republican House Speaker Kevin McCarthy was barely elected speaker following going through 15 votes, the most since 1859.
/yunhap news
