U.S. Treasury Secretary Janet Yellen.

(Reuters)

[Financial Channel/Comprehensive Report] U.S. Treasury Secretary Janet Yellen (Janet Yellen) said that she is nervous that the United States may face a debt default, and warned that if Congress does not raise the debt ceiling this summer, Americans may face a terrible spiral recession.

"Axios" reported that the Biden administration is trying to put pressure on the majority of the House of Representatives to ask the Republicans not to block or delay the raising of the debt ceiling.

Yellen admitted that the debt ceiling issue has made her quite nervous, saying that this is a disaster and the consequences will be devastating.

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In an interview, Yellen pointed out that if a default occurs, the United States will face a financial crisis and is expected to fall into recession. If the government cannot afford new debts, the economy will fall into chaos.

Yellen said spending would have to fall to match tax revenues, depriving the government of any ability to boost the economy with stimulus.

And fear may spread, making people afraid of consumption. Yellen believes that this situation may further affect spending on a psychological level and exacerbate the recession.

A full U.S. default would have ripple effects around the world, making borrowing more expensive for the world's poorest countries.

Yellen said that Americans will face higher borrowing costs, which will also cause large-scale turmoil around the world.

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