(Kitco News) If the debt ceiling is not raised in time, the U.S. will default, which would trigger a financial crisis and undermine the U.S. dollar, U.S. Treasury Secretary Janet Yellen told the U.S. Senate on Tuesday.
“If the debt ceiling is not raised, there would be a financial crisis, a calamity. It would undermine confidence in the dollar as a reserve currency … It would be a wound of enormous proportions,” Yellen said during her testimony before the U.S. Senate.
A U.S. default would also undermine the confidence in the U.S. government, Yellen added, urging how critical it is to act now.
“It is imperative that Congress swiftly addresses the debt limit. If it does not, America would default for the first time in history. The full faith and credit of the United States would be impaired, and our country would likely face a financial crisis and economic recession,” she stated.
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