The US Government’s Debt Crisis

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Braeden Slutsky, Staff Writer

On September 28, 2021, it was reported by Treasury Secretary Janet Yellen that, due to increased government spending, the United States government will run out of money by October 18. If this happens, then the government will default on its debt. If the government were to default on its debt, the results would be devastating to the economy, and to millions of Americans, due to the delaying of government payments.

This prediction comes after House Republicans blocked a bill that would have raised the debt ceiling, preventing a default.

“It is uncertain whether we could continue to meet all the nation’s commitments after that date,” Yellen wrote in a letter to Congress, warning them of the default. She cautioned, however, that the October 18 deadline is only an approximation, based on tax estimates. Because the federal government’s cash flows are “subject to unavoidable variability,” there is a degree of uncertainty as to when a debt default would happen.

“It is important to remember that estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward,” Yellen wrote. This uncertainty is another reason why Democrats in Congress are attempting to raise the ceiling so quickly, as a debt default could happen sooner than anticipated.