US Treasury head says debt default would cause 'catastrophe'

ISTANBUL

US Treasury Secretary Janet Yellen said Tuesday a debt default would cause "catastrophe" in the nation.

"Since 1789, the United States has paid all of our bills on time. It should stay that way. In my assessment – and that of economists across the board – a default on our debt would produce an economic and financial catastrophe," she told in her speech at the Sacramento Metropolitan Chamber of Commerce’s 51st Annual “Capitol-to-Capitol” Program.

Yellen, however, said this economic catastrophe is preventable.

"The solution is simple: Congress must vote to raise or suspend the debt limit. It should do so without conditions. And it should not wait until the last minute. I believe it is a basic responsibility of our nation’s leaders to get this done," she told.

Yellen has repeatedly urged Congress in recent months to suspend or raise the debt limit to avoid a default on government obligations.

The American economy hit its debt ceiling on Jan. 19, and Yellen said her agency has started taking "extraordinary measures" to avoid a default.

The US has never defaulted on its debt, while the debt ceiling has been raised 22 times between 1997 and 2022.​​​​​​​