United States Treasury Secretary Janet Yellen urged Congress on Thursday to raise its debt ceiling. Yellen warned that a US default would produce an “economic and financial catastrophe” that would spark a global economic downturn” and risk undermining the country’s ability to provide global leadership.

Yellen has been increasingly vocal about the debt in recent weeks.

“A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery. And it would spark a global downturn that would set us back much further,” Yellen said Thursday in Niigata, Japan, where she is attending a meeting of G7 finance ministers and central bankers. “It would also risk undermining US global economic leadership and raise questions about our ability to defend our national security interests,” she added, according to a report by CNN Business. 

Some market analysts, such as Gregory Mannarino said that the probability of a debt default is about 50/50. The ruling class in the U.S. could easily use a debt default as an excuse to crash the current system and install the new one.

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Yellen said Congress should just raise the debt ceiling since they have done so almost 80 times since 1960. She urged fellow members of the ruling class to act quickly to do so once again. Others, such as former rulers say there should not be a debt ceiling increase.

She spoke a few hours after former U.S. President Donald Trump, the frontrunner for the GOP presidential nomination in 2024, took questions from voters at a CNN town hall. He suggested Republicans should refuse to raise the debt limit if the White House does not agree to“massive” spending cuts. -CNN

“If they don’t give you massive cuts, you’re going to have to do a default, and I don’t believe they’re going to do a default because I think the Democrats will absolutely cave,” he said in response to a question.

According to CNN, in a report published last week, White House economists said a protracted default would wipe out more than 8 million jobs and cut the value of the stock market in half. The report estimated the impact under three scenarios: brinksmanship, a short default, and a protracted default.

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