Over the default issue, he cited Yellen who last week told the Senate Banking Committee that it was imperative Congress address the debt ceiling or the country would face “an economic catastrophe”.
The Federal debt is the money the government already owes on social security, military salaries, Medicare, and tax refund payments. Raising the debt limit is akin to increasing the country’s credit balance (on August 01, the debt limit was reset to $28.4 trillion).
Lewis went on: “Yellen says we can juggle the books until October 18, and then after that we have to start making hard choices, which will begin with continuing to pay US treasury bondholders and delaying payments on things like social security and the child tax credit. But she has not estimated how long that could last.
“Would they be able to do that for a day, or would it be weeks? That is something I’m really curious about that we don’t have any answer to.”
Failure to raise the debt limit could result in the loss of up to six million jobs, and government IOUs would effectively be worthless.