US Treasury Secretary Janet Yellen has once again urged Congress to raise the US debt ceiling.
In an opinion piece in the Wall Street Journal, Yellen wrote that if the United States failed to meet its obligations, it would spark a historic financial crisis.
"We would emerge from this crisis as a permanently weakened nation," Yellen wrote.
The creditworthiness of the USA has so far been a strategic advantage.
A crisis caused by the U.S. government default would worsen the economic damage from the ongoing coronavirus pandemic, stir markets and plunge the American economy into recession.
Millions of jobs would be lost and interest rates would rise permanently.
When is the risk of insolvency?
In her text, Yellen did not mention a point in time for the occurrence of insolvency.
However, it had previously announced that this could threaten as early as October if the Treasury Department had exhausted its payment reserves and extraordinary borrowing capacities within the framework of the $ 28.4 trillion mark.
Republicans in Congress have so far refused to raise or suspend the debt ceiling.
House spokeswoman Nancy Pelosi, a Democrat, pointed out that Congress raised the debt ceiling three times during the Trump administration with bipartisan approval.
She expects that this will also be the case this time.
House Democratic leader Jim Clyburn said on Sunday that Democrats may have to push through the debt ceiling without the support of Republicans.