October 19, 2021
Yeah the US government won’t technically default on its debt until December 3rd. But the Treasury Secretary is saying – that’s not good enough.
I told you in this video last week, congress agreed to increase the debt ceiling by $480 billion to keep the government from defaulting until December 3rd. But yesterday the Treasury Secretary sent this letter to the House Speaker and congressional leaders saying – basically – the train is already starting to come off the tracks.
In the letter Secretary Yellen says — to keep the government from defaulting, she will use that $480 billion Congress allocated but she’ll also have to continue using emergency cash conservation steps known as “extraordinary measures” between now and then to keep the government afloat. But that’s dicey and makes investors and the US economy appear shaky.
Again, raising or suspending the debt ceiling does *not* authorize new spending. It only pays the bills Congress – both Democrats and Republicans – have racked up over years. Paying our bills whether we like it or not — is a reality in our world. If Congress passes the programs, tax cuts and spending laws – the bill for all that eventually comes due and it has to be paid. Defaulting is not an option and would result in dire consequences for all of us. As I described in these two videos –that includes stopping or delaying military and federal employee pay, delaying or stopping social security checks, tax refunds, a possible stock market crash, your 401k taking a huge hit…I could go on. Just watch the videos.
Bottom line — Secretary Yellen makes it clear in this letter – as she has since the summer — Congress needs to do something long term. She says its “imperative that congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the government will satisfy all its obligations.”
Letter from Secretary Yellen to Congressional leaders here.
Extraordinary Measures defined by the Treasury Department here.
PLUS
Free community college may be out.
The monthly child tax credit may only last one more year.
The bank is going to report my account to the IRS over $600?
After several white house meetings today – we learned it’s very possible some of the pretty big proposals the President has been talking about will probably stripped out of his multi trillion dollar…so-called “human infrastructure” package and the overall price tag very likely will come down from $3.5 trillion.
So now – I want to talk with you about the word “proposal.”
All these items you’ve been hearing about that are included in that so-called “human infrastructure” package, like the monthly child tax credit being extended past December, free community college, Medicare expansion, paid family medical leave, child care credits, climate mitigation policies – are all “proposals.”
What you guys continue to miss is ..everything being talked about – until it’s passed through both the house and a senate is a proposal…an idea…up for discussion. And that’s the phase we’re in right now. The discussion phase. This is where politicians fight. They say things. They posture. They make promises that sometimes they can’t keep. And then they have to compromise.
This is not the time for you to get your hopes up about any particular program because it very well could get cut. In the end the only thing that matters is what deal can they make… what deal can pass through both the house and senate and is that deal something president is willing to sign.
Now – I mentioned those white house meetings – and some of the president’s big-ticket proposals may get cut. I don’t want to go into details – because even that may change. The negotiations will continue and lawmakers say they want some sort of deal solidified by the end of this week. And when something is solid – you know I’ll let you know.
