Treasury Secretary Janet Yellen said Thursday on CNN’s “OutFront” that it has become “increasingly damaging” for the United States to set a debt ceiling.
Yellen said, “Well, I think the prospect that Congress would not agree to raise the debt ceiling, which is what we’re faced, and of course, December 3, it’s a short time relative to the debt ceiling. So the uncertainty remains longer term. I think it is damaging to confidence of consumers, of investors. Of course, everyone, including me, breathed a sigh of relief that we were able to reach an agreement that gets us to December 3.”
She continued, “It’s not about future spending or taxes. We’ve incurred bills. Can the government be counted on to pay those bills? Americans, whether it’s people waiting for a Social Security check or military pay or bondholders who regard U.S. treasuries as the safest asset in the world, they need to never question that the United States will pay its bills.”
She added, “They need to get this done by the deadline that I set. I made it very clear that we will run out of cash quickly after October 18. This would be the first time in the country’s history that we would be unable to pay our bills. And it would be enormously damaging to the economy, to financial markets. I’ve said and continue to think it would be utterly catastrophic. It should be unthinkable.”
Yellen concluded, “I think it’s become increasingly damaging to America to have a debt ceiling. It’s led to a series of politically dangerous conflicts that have caused Americans and global markets to question whether or not America’s serious about paying its bills. It’s flirting with a self-inflicted crisis.”
Follow Pam Key on Twitter @pamkeyNEN