A US debt default could spark mass unemployment, payment failures, and catastrophe that would raise interest rates 'into perpetuity,' Treasury Secretary Janet Yellen warns

Yahoo! Finance ^ | 04/26/2023 | Jennifer Sor

[millenial4freedom]

A government debt default would be catastrophic for the US economy, sparking mass unemployment, payment failures, and interest rates rising "into perpetuity," according to US Treasury Secretary Janet Yellen.

"Since 1789, the United States has paid all of our bills on time, and it should stay that way," Yellen said at a Washington conference on Tuesday, warning of an economic disaster if the US failed to meet its debt obligations. A debt default will likely result in the government failing to make key military and social security payments, she speculated, and would cause mass layoffs of government officials. Households would also likely fail to make payments on mortgages, cars, and credit cards, causing a collapse in US credit markets.

[millenial4freedom]

Wouldn't it be easier to just cut profligate government spending?

[struggle]

Let’s try it and see what happens.

[Jonty30]

We are going to try it whether we want to or not.

[C210N]

The best solution is to switch from debt-based fiat to PM-backed real money.

[jimwatx]

They are playing a game of chicken to see if the Republicans will fold first.

[ComputerGuy]

So the only solution is to keep printing?

[C210N]

This is the time that the tables are turned, and taking advantage of a crisis and not letting to go to waste, works in our favor.

[ProtectOurFreedom]

Maybe the out-of-control federal government should have controlled itself sooner.

[wny]

US has already defaulted. Twice.

In 1933 the US owed you an ounce of gold when you had $20. After the default, the US only paid you about 5/8 an ounce of gold for that $20.

In 1971 the US owed you an ounce of gold when you had $35. After the default, the US wouldn’t give you any gold for that $35.

[Diana in Wisconsin]

"Wouldn't it be easier to just cut profligate government spending?"

[cld51860]

What a cluster.

[G Larry]

These ignorant, perpetual, liars seem to think we’re stupid enough to respond to their false alarms and pay the ransom.

[cld51860]

Modern monetary theory.

[cgbg]

Yup—as Nanzi said—We need to try it to see what is in it.

[ClearCase_guy]

Yup. No good choices in our future. I am 100% in favor of default and re-building an economic system which actively discourages all debt.

[nhbob1]

“she speculated, and would cause mass layoffs of government officials.”

She says this like its a bad thing.

[PubliusMM]

Hear! Hear!
Dump the un-Constitutional ‘departments’, too.
Pass amendment requiring Balanced Budget.
Dump the Income tax for the Fair Tax model.

[skeeter]

On the other hand, spending money with wild abandon like a drunken sailor in a Pattaya whorehouse guarantees health wealth and prosperity for all until kingdom come - Yahoo!

[ProudDeplorable]

"A government debt default would be catastrophic for the US economy"

Ya think????!!

Thanks for the insight, Old Yellen.

[PIF]

A US debt default could spark mass unemployment, payment failures, and catastrophe that would raise interest rates 'into perpetuity,' Treasury Secretary Janet Yellen warns promises.