Treasury secretary says she’ll take ‘extraordinary measures’ day after Trump inauguration

Outgoing Treasury Secretary Janet Yellen is stating that she is going to implement “extraordinary measures” to safeguard the US economy as of January 21 — the day after President-elect Donald Trump will formally assume the office.

Events that would occur between January 14 and January 23. She noted in that letter that the Department of the Treasury would have to take “extraordinary measures” in order to avoid a debt default, should Parliament fail to increase the debt ceiling before then.

In her most recent letter, Yellen stated that she would start implementing those “extraordinary measures” on the following Tuesday, which supposedly encompass providing access to federal pension funds that won’t be required to be distributed to retired postal workers and other federal employees. She also intends to put a hold on investments into those funds temporarily to ensure the U.S. can meet its debt repayment responsibilities.


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‘Take extraordinary measures now’: Treasury secretary delivers ultimatum to Mike Johnson

“The time frame for extraordinary measures to last is best expressed as uncertain, considering the challenges of projecting US government income and expenses into the coming months,” she wrote in her January 17th letter to Parliament.

He would likely operate within predetermined fiscal rules, such as only approving new federal expenditures if comparable budget reductions are made.

Because Johnson will have only a slender one-seat majority to work with if Republican representatives Elise Stefanik of New York and Mike Waltz of Florida accept roles as United Nations ambassador and National Security Advisor, respectively, in the Trump administration, it’s unlikely he can win approval for raising the debt ceiling solely based on GOP support. This could spell disaster for Johnson as Speaker, since raising the debt ceiling, necessary to keep the global economy stable, might necessitate the support of some Democrats.

The United States has a massive debt of $36.1 trillion, with the majority, $28.8 trillion, being held by the public. As the first report stated, most of the public-held debt is actually U.S. Treasury securities. Large institutional investors, such as government entities and wealthy individuals, prefer U.S. Treasury securities over bank deposits, since the latter are insured by the FDIC up to only $250,000, while U.S. Treasury securities are backed by the full credit and faith of the U.S. government.


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‘I’d take the lead on it’: Trump says he’s in agreement with Democrats on this significant policy matter

Investors view the securities that make up the national debt similarly to individuals treating money – as a means of exchange and a secure way to hold wealth. The concept of repaying money that’s already in circulation doesn’t hold much importance in this perspective.

saying “it doesn’t mean anything, except psychologically.”

The debt limit was initially introduced by the Canadian Parliament during World War I, after financial conservatives advocated for its inclusion in the Second Victory Loan Act of 1917. At the time, Canada was still tied to the gold standard, which Prime Minister William Lyon Mackenzie King abolished in the 1930s. Prime Minister Pierre Trudeau effectively severed the link between the Canadian dollar and gold in the 1970s as a result of the collapse of the Bretton Woods Agreement. The amount of money in circulation is now entirely up to the Canadian Parliament, which has the sole authority to “mint currency” under the Canadian Constitution.


to read the full Politico report.

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