US Warns About Risk Of Default
Date
12/28/2024 3:10:39 PM
(MENAFN- AzerNews)
By Alimat Aliyeva
The United States is expected to reach its national debt ceiling
in January, as confirmed by Finance Minister Janet Yellen. She sent
a letter to Congress's leadership, warning of the looming deadline,
Azernews reports.
According to Yellen, the debt ceiling will be hit between
January 14 and January 23. To avoid a default, the U.S. Treasury
will be forced to implement emergency measures. Under current U.S.
law, when the debt ceiling approaches, congress must act to prevent
a government default. This typically involves raising the borrowing
limit, or, in some cases, suspending or even permanently
eliminating the ceiling altogether.
In June 2023, the Fiscal Responsibility Act of 2023 was passed,
which temporarily suspended the debt limit until January 1, 2025.
However, with the deadline fast approaching, there is increasing
pressure on Congress to take action. On December 11, 2023, the U.S.
Government Accountability Office (GAO) urged Congress to
permanently eliminate the debt ceiling, suggesting that future
borrowing be linked directly to government revenue and expenditure
levels.
The looming debt ceiling crisis raises serious concerns about
the stability of the U.S. economy, as a failure to raise or suspend
the limit could lead to a government shutdown or even a default on
U.S. debt. This would not only undermine the U.S. government's
ability to pay its bills but also potentially damage its credit
rating, causing ripple effects across global financial markets.
The U.S. national debt ceiling has been a point of contention in
U.S. politics for years, with partisan divisions often leading to
last-minute negotiations and temporary solutions.
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