We called her old Yellen when she handed control of the Federal Reserve over to Jerome Powell in 2018 but Janet came back and she’s ready to play fetch for the palace as Imperial Minister of the Treasury. She’s totally convinced that civilization is about to collapse in a few weeks if we don’t raise the debt ceiling now. Republicans aren’t buying it. At least, not yet.
Treasury almost empty
The palace treasury is almost empty, Janet Yellen warns. Joe Biden and his cronies will be “flat broke” by October. This dire prediction will surely come to pass unless Congress ratchets the debt ceiling up a lot higher, and does it right now.
If Republicans don’t get with the program, Uncle Sam will get evicted. The way she puts it in her letter, if “Congress does not increase the debt ceiling, the country will not be able to service its debt.”
The Treasury Minister is convinced that “there’s a severe threat to the economy.” We’re about to declare bankruptcy.
“Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history.” Only Congress can keep the bill collectors from ringing Joe Biden’s phone at all hours of the day and night.
The real issue behind the issue is that there have been two important spending packages on the table while the Taliban was handed Afghanistan. They aren’t going anywhere. The first one needs Republican support. That’s the important one.
The second one is nothing but a huge sack of pork which Democrats plan to stuff with every single thing on their wish list. They can pass that one without any Republican help at all. The only problem is to do it, they have to raise the debt ceiling first. That’s where Yellen and the Treasury comes in.
A Mexican standoff
Republicans won’t raise the debt ceiling until Democrats agree to their version of the joint bill. Meanwhile, Democrats won’t agree to that until the credit card limit gets raised. It’s a Mexican standoff.
The Treasury is trying to take the heat off the palace by scaring the masses into forcing the GOP to cave in to demands. “Based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October.”
There isn’t a single second to waste, the Treasury dog howls. The process takes time and delaying now could “cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.” We can’t have that.
“At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk.”
The Treasury department admits that the debt ceiling increase could simply be packed into the Democrat pork barrel. There’s only one little snag to that. Democrats would totally own what they did.
“Axios noted including the debt ceiling increase in the reconciliation package would allow McConnell to point to Democrats as having taken on the debt.” Yellen “wants no part of that.”