The US government’s debt crisis threatens a worldwide economic recession.
US government’s appeal to Congress to avoid loan default.
If this happens, America’s economic leadership will be in danger.
Washington. US Finance Minister Janet Yellen said that the US government’s default in repaying the debt of $ 31.46 trillion could lead to a worldwide economic crisis. US Treasury Chief Janet Yellen urged Congress to raise the $31.4 trillion federal debt limit and avoid an unprecedented default. Yellen said that if this could not be done, then there would be a danger of recession in the world, and the risk of weakening of American economic leadership in the world would also increase a lot.
Yellen issued the stern warnings at a press conference ahead of a meeting in Japan with the Group of Seven (G7) as well as the finance ministers of India, Indonesia and Brazil. Yellen said that default in repaying the debt would risk ending the gains that were achieved by working hard to recover from the epidemic in the last few years. At the same time, it will promote a global recession which will take America further back. This will also increase the risk on the interests of the country’s national security. Yellen said that the crisis has arisen due to the non-cooperation of the Republican Party on this issue. The risk of default can lead to a decline in the credit rating of the US government. As happened in 2011 during the tussle to increase the debt ceiling.
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Point to be noted is that US President Joe Biden (Joe Biden) had already said that if the Congress does not approve the increase in the debt limit before the Treasury runs out of money to pay the government’s bills, then there is a risk of the American economy getting stuck in recession from June 1. Treasury Secretary Yellen said the crisis could push up interest rates on auto payments and credit cards. While the rates on loans were already increasing around June 1. Due to this, the American economy will have to face a big blow. It is not even possible to imagine the impact of shaking the confidence of financial markets, institutions and consumers. If this crisis is not resolved, then next week US President Joe Biden may have to leave the program of his trip to Hiroshima for the meeting of G7 leaders.
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Tags: American News, Joe Biden, Recession, US Congress
FIRST PUBLISHED : May 12, 2023, 14:30 IST