A ticking time bomb in the U.S. economy is running perilously close to detonation.
Long considered a harbinger of bad luck, Friday, Jan. 13 came with a warning for Congress that the country could default on its debt as soon as June.
With the U.S. reaching its debt limit of $31.4 trillion on Jan. 19, Treasury Secretary Janet Yellen urged lawmakers to increase or suspend the debt ceiling.
Her plea was taken by Peter Schiff, famed investor and market commentator, as an “official admission that the U.S. is running the world’s largest Ponzi scheme.”
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A political stand-off over the debt ceiling has been raging since Republicans regained control of the House of Representatives in the 2022 midterm elections.
President Joe Biden beseeched Congress not to hold the item hostage, suggesting a default could be “calamitous”.
His warnings hit deaf ears in the case of opposing Republicans, who are using their votes on an extension as leverage to seek spending cuts.
The Treasury can use “extraordinary measures” in the coming months to cover its many financial obligations, including Social Security and Medicare disbursements, but these emergency funds are limited.
At the end of the day, the U.S. simply must borrow more money, as it has done many times before.
Congress has set the limit for federal borrowing since 1917, raising it…
