Janet Yellen wrote in a letter Thursday that the Treasury can say with great confidence that it will be able to pay its obligations without any problems by December 15. However, with the government due to transfer $118 billion to the Highway Development Fund in December as part of an infrastructure development package proposed by the government and approved by President Joe Biden, Yellen says the US could go bankrupt after December 15. hill.

The US government debt ceiling rule sets a nominal ceiling on government debt, and if the government achieves this, it will not be able to take out new loans. Its current obligations – if it cannot pay it from its liquid resources – cannot be paid by the state and it goes bankrupt. This would shake global financial markets and cause a recession in the United States.

The government debt ceiling has been raised countless times, most recently in October of this year – at the time, it was expected that there would be no problem with repayment until December 3rd. At the time, the Republican opposition had not voted to raise the ceiling. The state apparatus has been temporarily shut down several times throughout history because the political debate over the rule has continued, but there has never been a bankruptcy of the state – it has always been brought up at the last minute. For details about government debt ruling In our previous article we wrote.

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