United States: Treasury estimates that it will run out of liquidity in October and worries about a default

Janet Yellen warned that the treasure of United States run out of money next month unless the Congress increase debt limit, while the government of Joe biden is increasingly concerned about a possible default.

In a letter addressed to the leaders of Congress this wednesday, the secretary of the treasury The American said he couldn’t offer “an accurate estimate” of when he would run out of cash, but that the “most likely outcome” was that their coffers “would run out during the month of October”.

Increase the debt ceiling American was a matter of routine for the Congress, which allows the treasure pay bills for expenses already approved by lawmakers.

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However, since the presidency of Barack obama, Republican lawmakers have resisted the increase in debt limit when the White House is controlled by Democrats, often demanding conditions that have sparked deadlocks in the Capitol and which have sometimes led to United States on the edge of fault.

Yellen written in his letter to the leaders of Congress who even “wait until the last minute” to avoid a debt limit crisis could cause “a serious damage to business and consumer confidence, increase the cost of short-term loans to taxpayers and harm the credit rating of United States“.

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In addition, “a delay that would call into question the ability of the federal government to meet all of its obligations would likely result in a irreparable damage to the US economy and global financial markets“, aadi.

The raising the debt ceiling in the United States It could be adopted as a stand-alone bill, although it is more likely to be joined to other economic and budgetary laws which are envisaged in the Congress in the next weeks.

This includes the $ 3.5 trillion social safety net extension, which should only get Democratic votes, and a government funding bill to avoid a shutdown.