Yellen: A Default Would Cause An Economic And Financial Catastrophe

Treasury Secretary Janet Yellen will tell the Sacramento Metropolitan Chamber of Commerce today that a federal default would cause an economic "catastrophe."

• Yellen will say: "We have enacted our generation’s most ambitious investment in infrastructure; led a major expansion of American advanced manufacturing; and passed the boldest climate action in our nation’s history."
• Yellen: "The Inflation Reduction Act presents a generational economic opportunity... and extend our country’s economic leadership in key clean energy..."
• She will warn that the economic recovery is under threat: "In my assessment [...] a default on our debt would produce an economic and financial catastrophe."
• "Household payments on mortgages, auto loans, and credit cards would rise. And American businesses would see credit markets deteriorate... it is unlikely that the federal government would be able to issue [Social Security] payments to millions of Americans... In the longer term, a default would raise the cost of borrowing into perpetuity. Future investments would become substantially more costly."
• "This economic catastrophe is preventable... 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."