Yellen says the U.S. defaulting should be unthinkable

Treasury Secretary Janet Yellen said the idea of ​​US lawmakers allowing the country to default on its debts should be “inconceivable.”

Yellen told reporters ahead of the G7 finance ministers and central bank governors meeting in Niigata that she was aware that former President Donald Trump had suggested to Republican lawmakers that they allow the country to default on its debts. rice field.

“I think the idea of ​​a default would hurt the U.S. and global economy so badly that no one should think about it,” he told reporters. “America should never default.”

When asked what steps the Biden administration could take after defaulting on its debt, Yellen stressed that lawmakers must raise the debt ceiling.

“There is no good alternative that will save us from catastrophe. It’s about avoiding terrible consequences,” she told reporters, noting that defaults can be prevented.

“There is no good reason for a good crisis of our own making. Congress has raised and suspended the debt ceiling almost 80 times since 1960. We urge you to act quickly to raise it again.” ‘ said.

Yellen’s comments came after she warned of “economic catastrophe” if the U.S. fails to raise the debt ceiling in the coming weeks. He has previously warned that the U.S. could default on its debt sooner than expected, and could be out of action as early as June 1.

Media reports last week quoted Treasury officials as saying her trip to Japan would be shortened to ensure she could participate in tackling the debt ceiling issue.

He told reporters on Thursday: “There is another meeting scheduled for next Friday and officials are considering whether the matter can be resolved. So the disagreements will be resolved and the debt ceiling will be raised. I am very much looking forward to it,” he said.