From Monday the U.S. Treasury Department began to implement “emergency measures” to continue financial operations in connection with the debt ceiling of the United States, said the letter of Janet Yellen, head of the U.S. Treasury Department, to the Democratic and Republican leaders in the U.S. Congress
The head of the USA Ministry of Finance reminded that in the previous letter dated July 23 she had warned the legislators that the debt level in the United States “will reach its legislative maximum starting from August 1”, reported.
“With this letter, I am notifying you of <…> the additional emergency measures that the Treasury Department has begun to invoke today”, – Yellen said.
She said, “The period of time during which the emergency measures may last this year is more uncertain due to the economic impact of the pandemic. For this reason I respectfully urge Congress <…> to take action as soon as possible”, – the US Treasury chief added, referring to an increase in the national debt ceiling.
We would remind you that on July 24th the U.S. Treasury Secretary Janet Yellen warned the Congress about the threat of the default if the American legislators refuse to raise the national debt ceiling of the United States before August 2nd. According to her, by October, 1 the ability of the American government to pay its debts could be seriously undermined, because serious budget expenditures are planned for that period. Yellen stressed that a default would “cause irreparable damage to the economy” of the United States.
Previously, the Congressional Budget Office (CBO) projected a $3 trillion deficit in the United States federal budget in fiscal year 2021 (which began on October 1, 2020).
In the first half of fiscal year 2021, the US budget deficit exceeded $1.7 trillion. Meanwhile, in March, US President Joe Biden directed $1.9 trillion to stimulate the US economy in the face of a coronavirus pandemic. Against the background of the infusion of a significant amount of liquidity into the US economy and the rising US national debt, the expert warned of a rise in dollar inflation.