Washington: US Treasury Secretary Janet Yellen warned Tuesday that US debt defaults could trigger another recession, as an approach to the deadline of October 18.
“I really hope it will cause a recession,” said Yellen at CNBC, referring to what would be an unprecedented US default when parliamentarians compete for the increase in the debt ceiling.
Yellen has warned beforehand that after October 18, the United States will not have funds to fulfill their obligations to creditors if the congress does not relax the debt ceiling.
Congress has done tens of this time for decades since setting loan limits, and vote is usually bipartisan and free drama.
This year, reflecting extraordinary misery in Washington, Republicans refused to choose lifting the ceiling and vowed even to prevent the Democrats from passing the party’s voice.
On the contrary, the Republican Senate tried to force the Democrats to use complex maneuvers called reconciliation to take responsibility for the debt increase.
Democrats so far refused, accusing Republicans to take the nation’s financial hostage.
President Joe Biden on Monday is called Republican opponents “reckless and dangerous” because they refused to join Democrats in increasing the debt limit.