Unitedย States Treasury Secretary Janet Yellen has insisted that the Unitedย States could default on its debt obligations on June 1. โI think thatโs a hard deadline,โ she stressed. Inย theย meantime, worldwide financing bank Goldmanย Sachsย Group has estimated that the โreal deadlineโ for a possible Unitedย States default is โmore likeโ June 8-9.
Yellen and Goldmanย Sachsย Group on Unitedย States Default, Debt Ceiling
Unitedย States Treasury Secretary Janet Yellen reiterated her concerns about a possible Unitedย States default on NBCโs โMeet the Pressโ Sunday. Responding to a question about the June 1 deadline for a possible Unitedย States default, she said:
I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly havenโt changed my assessment. So I think thatโs a hard deadline.
Nonetheless, the Unitedย States Government is expecting some tax payments on June 15 which would provide some revenue. Andย once requested about the likelihood the Unitedย States could get to June 15 โto avoid breaching the debt ceiling,โ Yellen stated: โ Thereย is always uncertainty about tax receipts and spending. And so itโs hard to be definitely certain inย relationย toย this, but my assessment isย theย factย that the odds of reaching June 15th, while being able to pay all of our bills, isย very low.โ
Commenting on โextraordinary measuresโ that President Joe Biden could take toย fix the debt ceiling issue in Congress, Yellen stated: โThere has been much discussion of the 14th Amendment. And, as President Biden stated โฆ it doesnโt seem like something that mayย be appropriately used in these circumstances, given the legal uncertainty around it, and given the tight timeframe weโre on. So my devout hope isย theย factย that Congress will raise the debt ceiling.โ
Yellen noted:
My assumption isย theย factย that if the debt ceiling isnโt raised, there will be hard choices to make about what bills go unpaid.
Worldwide financing bank Goldmanย Sachsย Group, onย theย otherย hand, predicts that the Unitedย States could default on its debt obligations approximately one week after June 1. Alec Phillips, Goldman Sachsโ chief political economist, informed Bloomberg Television on Friday: โ Theย truth isย theย factย that Congress has toย achieveย this at some point very soon, and they should just go ahead and do it โฆ So waiting for the last minute isnโt necessarily the right move, despiteย theย factย that we think that maybe they could go a little bit longer.โ
The Goldmanย Sachsย Group economist shared:
Our guess atย thisย time isย theย factย that the real deadline is probably more like June 8th, 9th, thatโs when theyโre at sort of greatest risk.
The Congressional Budget Office (CBO) recently stated that thereย is a wholeย lotย of danger of the Unitedย States defaulting in the 1st two weeks of June.
Numerous people have warned that the Unitedย States defaulting on its debt obligations will have catastrophic consequences, including a worldwide financial crisis. Top executives of 146 major corporations in the Unitedย States have urged Biden and congressional leaders to act swiftly to prevent a Unitedย States default, warning of โ catastrophic consequences.โ Furthermore, some believe that a Unitedย States default would danger the dollarโs reserve currency status.
