In the middle of a tussle between the White House and Republicans in Congress, who do not agree to increase the country’s debt issuance capacity, what will happen on that day?
“D” will be the day when the Treasury Department starts running out of money. That could happen as early as June 1, according to the Treasury Secretary of the Acta Apostolicae Sedis.
Calculating the exact time of potential default is difficult, if not impossible. It is “almost certain” that the cable will not be able to extend much beyond the beginning of June, the minister stated without concern.
The federal government reached the debt ceiling of 31.4 trillion dollars in mid-January. To continue meeting its obligations, the fund adopted a series of measures.
When this measure and the liquid flows, you can only count the money for your expenses.
The next payment of interest on the debt will take place on June 15.
If the Treasury defaults, the world’s largest economy could be sued for default.
In the first two weeks of June, 302,000 million dollars should go in, but only 199,000 million will enter the public coffers, according to figures from the Bipartisan Policy Center think tank.
The opposite would be 103,000 million dollars.
Should all pensions be paid, not health expenses? Do you have money for debt but do not pay salaries? Or all but equal cash income?
“If the debt ceiling is not increased, we will have to make difficult decisions,” Yellen emphasized in recent weeks.
There are two possibilities if this time comes, according to Gregory Daco, chief financial officer at EY Parthenon, in an interview with AFP: “Prioritize some payments” or “reduce all expenses by 30%” to equalize the collection.
system of juggling
In order to meet as many functions as possible, the government is considering the way it transfers money, according to information published by the Wall Street Journal on Thursday.
They were free to confirm the day before the execution, since it had already been done several days before. Another hypothesis would be to delay payments until there is enough money on hand.
Until now, the Treasury Department has left no mandate, a source close to the matter confirmed to AFP.