Treasury Secretary Janet Yellen urged Congress to raise the federal government’s borrowing limit to avoid an unprecedented default scenario that will lead to a global economic recession and risk undermining leadership USA in the global economy.

Yellen included the warning in comments she prepared for a press conference she will give shortly before meeting in Japan with her G7 counterparts, as well as India, Indonesia and Brazil.

“The payment freeze will jeopardize the gains we have worked so hard for over the past few years as we recover from the pandemic. And this will cause a global recession that will throw us even further,” he stressed. “It also risks undermining US leadership in the global economy and calling into question our ability to protect national security interests,” the US Secretary of State added.

Warnings from Biden too

US President Joe Biden said on Wednesday that if Congress does not act before the federal government runs out of money, which could happen as early as June 1, the US economy will be in danger of a recession.

Yellen stressed that Republican political games on the issue amounted to a “self-created crisis” and that a simple threat of default could lead to a downgrade of the US government, as happened during the 2011 federal law controversy. loan limit.

At the same time, it could raise interest rates on mortgages, credit cards and auto loans, Yellen said.

Biden insists that Congress has a constitutional obligation to raise the borrowing limit, which is already $31.4 trillion. dollars (28.6 trillion euros) without conditions. But Republicans, who control the House of Representatives, attribute the increase to a major cut in public spending.

In addition, former U.S. President Donald Trump yesterday urged Republicans to force a default if they do not get “huge” government spending cuts from the Biden administration.

^{According to APE – MEB, Reuters, AFP}