At the beginning of June, the US is threatened with bankruptcy

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The Washington government is at risk of default in the first two weeks of June unless the debt ceiling is raised, according to estimates by the independent budget bureau of the US Congress. With the debt ceiling unchanged, there is a significant risk that the government will fail to meet all its obligations sometime in the first two weeks of June, the Congressional Budget Office said Friday. If the debt ceiling is not raised or suspended before Treasury reserves are exhausted, the government will have to delay payments for certain activities, default on its debt obligations, or both.

If the so-called extraordinary measures of the Ministry of Finance until June 15 are sufficient to finance the public company, the new tax revenues expected then may provide some room for improvement. Then there is a threat of non-payment until the end of July. Most recently, Treasury Secretary Janet Yellen (76) warned that such a failure was possible as early as June 1.

Bad consequences for the US

In the US, Congress sets a debt ceiling at irregular intervals and determines how much money the state can borrow. In the meantime, the current debt ceiling has been reached in the US and the US Treasury Department has to draw on the reserves – because the US is no longer allowed to take on debt to pay its bills.

To increase the debt limit, the Democrats of US President Joe Biden (80) need the Republicans in Congress. However, they oppose and demand cuts from Biden, for example in the social sector. A first high-level meeting of congressional party leaders at the White House ended Tuesday without result. Another meeting scheduled for Friday has been postponed to next week. A bankruptcy of the largest economy would have devastating consequences for the US and the global economy. (SDA)

Source: Blick