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  20 Sep 2021, 12:39

Yellen urges Congress to raise debt limit to avoid financial crisis

  WASHINGTON, Sept 20, 2021 (BSS/AFP) - US Treasury Secretary Janet Yellen
pleaded Sunday for Congress to raise the debt ceiling in order to avoid a
"historic financial crisis."

  In an editorial published in the Wall Street Journal, Yellen points out
that the United States has always raised the debt ceiling before exceeding
its limit.

  "The US has never defaulted. Not once."

  "Doing so would likely precipitate a historic financial crisis," Yellen
wrote.

  "Default could trigger a spike in interest rates, a steep drop in stock
prices and other financial turmoil."

  The debt ceiling, which only Congress can increase, came back into force on
August 1 after it had been suspended for two years.

  It prohibits the United States from borrowing more than the current $28.4
trillion limit if not raised.

  The issue is a regular topic of partisan rancor in Washington. The debt
ceiling has been raised about 80 times since the 1960s.

  Last week, the Treasury said the United States was set to run out of money
sometime in October.

  In her editorial, Yellen spelled out a list of potential financial
catastrophes that could befall the country if it did not raise the debt limit
and could not meet its existing financial deadlines.

  "In a matter of days, millions of Americans could be strapped for cash,"
she warned.

  "Nearly 50 million seniors could stop receiving Social Security checks for
a time. Troops could go unpaid."

  "We would emerge from this crisis a permanently weaker nation," Yellen
said.

  Yellen recalled the 2011 debt crisis, "debt-limit brinkmanship pushed
America to the edge of crisis."

  The Obama-era debt debate impasse saw the country come the closest it had
ever been to defaulting.

  In the aftermath, debt rating organization Standard and Poor's degraded the
United States' debt rating to "AAA" and sent shockwaves through the markets.

  Yellen said acting sooner rather than later could avoid a repeat of the
worst outcomes of 2011.

  "Time is money here, potentially billions of dollars," Yellen wrote.

  "Neither delay nor default is tolerable," she said.

  "The past 17 months have tested our nation's economic strength. We are just
now emerging from crisis. We must not plunge ourselves back into an entirely
avoidable one."

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