US Treasury Secretary Janet Yellen has warned that the United States could see a recession and
“cause a global financial crisis” if it defaults on its national debt as lawmakers grapple over raising
the debt limit.
Yellen made the comments on Friday in Senegal, where she is on a three-country visit to Africa. Her
remarks came after the US Treasury started taking “extraordinary measures” to fend off a default as the
country reached its $31.4 trillion debt ceiling. The Treasury has warned that the “extraordinary measures”
would only help for a limited time.
Yellen stated that the actual date on which the Treasury would no longer be able to use these measures is
“quite uncertain,” and could come in June, AFP reported.
She added that if Congress fails to raise the debt limit, the US could see a downgrading of its debt “at
“If that happened, our borrowing costs would increase, and every American would see that their borrowing
costs would increase as well,” she added.
“On top of that, a failure to make payments that are due, whether it’s to bondholders or to social security
recipients, or to our military, would undoubtedly cause a recession in the US economy and could cause a
global financial crisis,” Yellen said.
The debt limit issue has set the table for a showdown between the White House, Democrats in the Senate
and a Republican-controlled House.
Far-right Republicans want Democratic President Joe Biden to agree to slash government spending. They
argue that radical cuts are needed to reduce borrowing.
“Unchecked spending will have dire consequences,” said Republican House Ways and Means Committee
Chairman Jason Smith in a statement.
“Congress cannot continue mortgaging our children and grandchildren’s futures to borrow from foreign
nations like China,” Smith added.
Democrats want to quickly pass debt limit legislation, but House Republicans are adamant that they will not
cooperate without major spending cuts.
“The Republicans were largely elected to get control of reckless spending,” US Congressman Don Bacon
(R-Neb.) said this weekend. “On our side we have to realize… we can’t get everything we want either. I want
our side to negotiate with the Democrats in good faith.”
US House Republicans have reportedly put together a plan on what the Treasury should do if the United
States does come up against its debt limit.
They threatened to use the debt ceiling as leverage to demand spending cuts from Democrats and the
Yellen speaks of ‘unspeakable cruelty’ in Africa
On Saturday in Senegal, Yellen also spoke of the “unspeakable cruelty” and enduring consequences of the
trans-Atlantic slave trade.
Yellen visited the House of Slaves, a fort built in the late 18th century on Goree Island off the coast of Senegal as a transit point for human beings before they were forcibly transported across the
Atlantic, Reuters reported.
“I take from this place the importance of redoubling our commitment to fight for our shared principles and the
values of freedom and human rights where ever they are threatened – in Africa, in the United States and around the world,” she wrote in the visitor’s log.
Yellen underscored the enduring ties that bind Africa and the United States.
“Ultimately, Gorée Island reminds us that the histories of Africa and America are intimately connected. We know that the tragedy did not stop with the generation of humans taken from here,” she said.
This article was originally published by Press TV.