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U.S. government spending is about to collide with the Congressionally-mandated limit on the national debt and the treasury will no longer be able to pay the country’s bills some time in August unless legislators raise the limit before their August recess, Treasury Secretary Janet Yellin warned in testimony before Congress on 23 June.
Because lingering effects of the economic shutdown make it difficult to predict federal revenues, the treasury is uncertain exactly when that limit will be reached, Yellin said.
“It’s possible we could reach that point when Congress is out in August,” she told lawmakers. “I really would urge prompt action” to raise or suspend the limit.”
If the limit is reached before Congress acts, the U.S. could default on its debts, an event Yellin called “unthinkable.”
“Failing to increase the debt limit would have absolutely catastrophic economic consequences,” she said.
“I believe it would precipitate a financial crisis,” she added. “It would threaten the jobs and savings of Americans at a time when we’re still recovering” from 2020’s economic collapse.
TREND FORECAST: The economic growth generated by massive stimulus plans that artificially generated growth and monetized debt will weaken as the money pumping schemes wind down. As the economy slows the Federal Reserve and Washington will invent new schemes undreamed of to again artificially prop up growth.
And if they can’t, as Gerald Celente notes, “When all else fails, they take you to war.”