Yellen warns that the US will default on its debt on December 15

The Secretary of the Treasury of USA, Janet Yellen, warned that the country could default on the national debt on December 15 and urged Congress to approve as soon as possible a suspension of the debt ceiling.

Yellen’s warning, however, is good news for the United States that it would run out of funds to meet debt payments two weeks early, on Dec. 3, according to initial estimates from the Treasury Department.

In a letter to Congress, Yellen explained that he had revised those initial estimates after the approval of a legislative package of US $ 1.2 trillion for the country’s infrastructure and had concluded that the government will have enough money until December 15.

However, he warned that the cash flow that the Executive has at his disposal is subject to “inevitable variability”, so that date could change again.

“To ensure America’s full confidence and credit, it is critical that Congress raise or suspend the debt ceiling as soon as possible,” Yellen argued.

Disagreements between Democrats and Republicans brought the United States to the brink of defaulting last October, although Congress finally managed to temporarily suspend the debt ceiling.

So far, there has been no progress in negotiations between Democrats and Republicans to ensure that the United States can continue to pay its debts in December; But Yellen’s new calculations give the two parties more time to reach an agreement.

The United States has never had to declare the suspension of payments on its national debt, but it was very close in 2011, when the mere possibility of that happening unleashed chaos in the financial markets and caused Standard & Poor’s to lower the solvency note. from the country.

From time to time, the United States appears to default on the national debt, because, unlike other countries, the United States Government can only issue debt up to the limit established by Congress, which has the power to raise that ceiling as it sees fit.