Economic crisis hitting America.. 5 possible scenarios

The United States is approaching a terrifying scenario on the economic level, and in order to avoid that, US President Joe Biden called the four top leaders in Congress for an urgent meeting at the White House, to be held next week.

This call came after Treasury Secretary Janet Yellen warned that the United States is threatened to default on its debts by next June.

American debt crisis

The US debt crisis, which will reach historic levels next June, has worsened, coinciding with the high level of inflation and slow growth, which prompts Congress and the government to approve an emergency plan in order to avoid an "economic catastrophe".

Shocking speech to Congress

Elaine sent a shocking speech to Congress, Monday, in which she called for preparations for the possibility of the US government defaulting on its debts, starting next June.

Yellen acknowledged that the date is subject to change and could come weeks later than expected, given the difficulty in predicting government cash flows.

But based on April tax receipts and current spending levels, I expected the government to run short of cash by June 1.

"Given current projections, it is imperative that Congress act as soon as possible to increase or suspend the debt limit in a manner that assures that the government will continue to make its payments," Yellen wrote in a letter to the House of Representatives.

  Yellen announced last January that the country had reached the limit of its debt ($31.381 trillion), and that it had begun to take "extraordinary measures" such as postponing pension investments to conserve liquidity.

Possible scenarios

For his part, the American political analyst, Deacon Hyatt, puts forward several expected scenarios for the current crisis, most notably:

Agreement between Democrats and Republicans on a deal to raise the debt limit.

- A last-minute deal is reached, the crisis is over, and everything is back to business as usual.

- The continuation of the crisis and the government's delay in paying its obligations, paving the way for a partisan confrontation that could turn into an economic or constitutional crisis, or both.

- Among the possibilities, President Joe Biden could decide to defy Congress and order the Treasury Department to ignore the debt limit, bringing a potentially high-stakes case to the Supreme Court.

- In the worst-case scenario, the government will stop paying its many obligations on time, dealing a far-reaching blow to an economy already sliding into recession.