U.S Debt Default Crisis

By: Logan Antio

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Treasury Secretary Janet Yellen warned lawmakers that the federal government could run out of cash to pay bills by October 18th, which would force the government to temporarily shut down, unless Congress increases the debt ceiling. Yellen clarified that if something was not done by the middle of October the U.S would be led into the first-ever default, which would cause "catastrophic" damage to the economy.

So how exactly could this affect citizens? People receiving social security benefits might not get checks, including nearly 50 million senior citizens. Federal employees, including the military, will not receive payment from the government. Veterans who receive payment through a pension would also be affected as they wouldn't be paid. People who rely on monthly child tax credits will have delayed checks. Delays in Medicare payments could occur. Stock prices could plummet by as much as one-third, which would erase around $15 trillion in household wealth.

Not only would a debt default cause damage to U.S Citizens, but it would impact many other countries. It would cause reduced global trade because consumers and businesses would purchase fewer goods and services from outside the country.

To avoid a partial government shutdown, Congress passed legislation to fund the government through December 3. President Joe Biden and other Democrats are now focusing on raising the current federal borrowing limit($28.4 trillion).