A crisis for the US and global financial system is looming, unless a conflict over lifting the US debt ceiling can be quickly resolved. According to WSWS, The conflict came into public prominence last week, when US Treasury Secretary Janet Yellen wrote a letter to Congress, warning that the government was running out of money, after a debt limit on government borrowing was reinstated on August 1.
The limit had been suspended for the previous two years. Since then, Yellen wrote, the Treasury had been “employing certain extraordinary measures” to ensure that the government could continue to fund itself, but these measures were reaching their limit. “Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations, for the first time in our history,” she said.
The Treasury was not able to provide a specific estimate of how long the extraordinary measures would last, but the best and most recent estimate was that money would run out some time in the middle of October. Express News reported, “We’ve set a goal, and the goal is achievable.
I promise you, I promise you,” the president said on the outskirts of Denver, Colorado on Tuesday.“It’s going to create great economic growth, reduce inflation, and put people in a place where those beautiful children in the back are never going to have to worry about what we’re worried about right now.”
While Mr. Biden presents as optimistic, Congress returns next week, and his Government will enter something of a dangerous crunch period. In approximately mid-October, the US Government’s debt could rise to $28.5 trillion, beyond which its Treasury may be unable to go through with such ambitious spending plans.
A plan is being considered by the House speaker, Nancy Pelosi, and the Senate majority leader, Chuck Schumer, which involves suspending the debt ceiling past the 2022 midterm elections in a stopgap bill that would keep the US Government-funded through early December.