In a letter to Congress last week, Yellen warned that if the debt ceiling isn't raised and soon, the United States will run out of money and will not be able to meet its financial obligations for the first time in history.
And all under Joe Biden.
“Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history,” Yellen wrote.
“Based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October," Yellen continued.
She went on to lay out why this is a big deal, noting that delaying now could “cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.
“A delay that calls into question the federal government’s ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets,” she wrote.
“At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk.”
Now for the really bad news: Republicans in Congress are in no mood to give Biden a 'win' and substantially increase the debt ceiling because for one thing, the U.S. national debt is ridiculously high as it is, Axios reported.
"We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," Yellen said in the letter.
The Democrats in the House can pass a debt ceiling increase with their simple majority; but in the Senate, there is a 50-50 split and unless Democrats use budget reconciliation (they can only use it so many times), they will need 10 Republicans to overcome the 60-vote filibuster.
And good luck with that; Senate Majority Leader Mitch McConnell said he doesn't want to do the debt ceiling deal and that Democrats should just include it in their massive $3.5 trillion spending bill currently in Congress.
But House Speaker Nancy Pelosi doesn't want to do that -- so we're in for a showdown.
Here's the problem if the U.S. defaults: Global markets will crash, the global economy will crash, and suddenly, all of the fiat dollars floating around in bank accounts and in economies around the world will become worthless. And we'll see a global collapse the likes of which has never happened and which will make the Great Depression in the 1930s look tame by comparison.
The Western Journal has more on how this could all go down:
Reconciliations only require majority votes in both the House and Senate, meaning Republicans can’t filibuster the bill in the Senate. Axios noted including the debt ceiling increase in the reconciliation package would allow McConnell to point to Democrats as having taken on the debt, however, Yellen wants no part of that. The treasury secretary instead advocated for raising the ceiling “through regular order, with broad bipartisan support.”
While McConnell may get the optics of Democrats underwriting debt-driven spending, who ultimately pays the bill?
The U.S. government is truly teetering, and as we suspected, it's all going to go to you-know-what in a hand basket under the worst, most mentally deficient president we've ever had.
It didn't have to be this way -- and wouldn't have been -- if Trump's reelection wasn't stolen from him.
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