DEBT CEILING

Is the US federal government really running out of money?

Treasury Secretary warned earlier this week that the federal government was expected to run out of money by October 18 if the debt limit isn't suspended.

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Is the US government running out of money?
CAGLA GURDOGAN REUTERS

Hours after the Republican Senators blocked the increase of the debt ceiling, Treasury Secretary Janet Yellen warned lawmakers that the US government will run out of cash by October 18 if Congress fails to increase the debt limit.

"It is uncertain whether we could continue to meet all the nation's commitments after that date," Yellen's letter said. Moreover, she emphasized that the date is just an estimation based on tax payments and that date could vary as government's cash flows are "subject to unavoidable variability."

An anticipated catastrophe

This evidences the risk there is of the cash running out earlier than expected, which would cause an inevitable debt default.

This debt default would be disastrous for the US economy, causing markets to stagnate and massive payment delays in all American public services.

"It is important to remember that estimates regarding how long our remaining extraordinary measures and cash may last can unpredictably shift forward or backward," she added. "This uncertainty underscores the critical importance of not waiting to raise or suspend the debt limit. The full faith and credit of the United States should put at risk."

However, solving this problem before the money runs out is not an easy one, as House Republican leaders are pushing Senators to reject any debt raise or suspension. The main argument to oppose the voting is it will create more debt and just make it simple for the government to spend more unnecessary money, even though much of that debt precedes the Biden administration.

Jokes come pouring in on Twitter

After this serious issue concerning federal government officials, American citizens, who have been continually asking with no success both Biden and Trump administrations for more help over the course of the pandemic, have decided to take the situation with humor, making jokes on social media.