U.S. Treasury Secretary Janet Yellen has warned again about the consequences of the U.S. defaulting on its debt. During a press conference in Niigata, Japan, Yellen stated that this would be a self-inflicted crisis, and urged Congress to act quickly on the matter, stating that defaulting would be an unthinkable outcome on this issue.
Yellen declared: “There is no good alternative that will save us from catastrophe. I don’t want to get into ranking which bad alternative is better than others, but the only reasonable thing is to raise the debt ceiling and to avoid the dreadful consequences that will come.”
Furthermore, Yellen stated that, for her, this would be a self-inflicted crisis that has no reason to be happening. She explained: “There is no good reason to generate a good crisis of our own making. The U.S. Congress has raised or suspended the debt limit almost 80 times since 1960. I urge it to act quickly to do so once again.”
Yellen had warned before about the catastrophe that the U.S. defaulting on its debt would mean for the economic system of the country and markets worldwide. Yellen also referred to this issue this time, stating that the consequences would be unthinkable.
She explained: “The notion of defaulting on our debt is something that would so badly undermine the U.S. and global economy that I think it should be regarded by everyone as unthinkable. America should never default.”
Bipartisan negotiations on the debt limit issue have not been successful, as the Republican party demands a series of cost cuts that would affect spending in some key areas for the Democrat side, including healthcare and other social benefits. Negotiations are slated to restart this Friday, and Yellen is “very hopeful” that the two parties will be able to bridge their differences to raise the debt limit.