Biden’s Treasury Secretary Who Oversaw $1.83 Trillion Deficit In 2024 Now Sounds Alarm On $36 Trillion Debt Crisis As Trump Takes Over – Financial Freedom Countdown

Treasury Secretary Janet Yellen has delivered a stark warning to Congress: the U.S. government is set to hit its $36 trillion debt ceiling as early as January 14, 2024.

With the debt ceiling suspension ending on January 1, Yellen stressed that without immediate congressional action, extraordinary measures will be required to prevent a catastrophic default.

What Are Extraordinary Measures, and How Long Can They Last?

Extraordinary measures, which include delaying investments in government worker savings plans and postponing certain payments, are temporary fixes.

While these accounting maneuvers could buy the federal government months of financial breathing room, they do not eliminate the risk of default.

Experts estimate the critical date when the U.S. runs out of cash, could occur by mid-2024 if Congress fails to act.

Trump Administration Inherits Debt Crisis

As President-elect Donald Trump prepares to take office, the debt ceiling showdown threatens to become one of his administration’s earliest and most challenging fiscal tests.

Trump has called for the debt ceiling to be abolished, aligning himself—surprisingly—with a position historically favored by Democrats.

The debt limit was suspended in June 2023 as part of the Fiscal Responsibility Act after a contentious negotiation over federal spending, work requirements for receiving government benefits and funding for the Internal Revenue Service. That suspension is scheduled to expire on 2nd January 2025.

Failed Attempts to Resolve the Issue Before Year-End

Despite Trump’s push to include a provision to raise or eliminate the debt ceiling in December’s government funding bill, Congress declined.

38 GOP lawmakers, mostly hardline fiscal conservatives, joined with most Democrats to sink a spending bill that included the debt ceiling extension leaving the debt crisis unresolved and placing it on the incoming administration’s already packed to-do list.

What Happens If the U.S. Defaults?

Defaulting on the national debt would be unprecedented and disastrous. A default would mean the U.S. government cannot pay its bills, including obligations to bondholders, Social Security recipients, and military personnel.

Global Financial Impact: U.S. Treasury bonds, a cornerstone of global financial stability, would lose their status as a “safe investment.

Domestic Consequences: The Treasury Department warns of a potential financial crisis that would threaten American jobs, savings, and economic growth.

In 2013, a similar standoff saw the U.S. economy lose 1% of GDP despite narrowly avoiding a default. This precedent highlights the economic dangers of political brinkmanship over the debt ceiling.

Trump’s Surprising Take on the Debt Ceiling

In a shift from his party’s traditional stance, Trump recently endorsed the elimination of the debt ceiling. Calling it a “burden” on governance, he criticized Congress’s failure to address the issue.

Yellen’s Call for Urgent Action

Yellen emphasized the importance of protecting the full faith and credit of the U.S., warning that even the debate over the debt ceiling could have negative economic consequences. She urged Congress to prioritize resolving the crisis before extraordinary measures are exhausted.

Inflation and Borrowing Costs Add Pressure

The inflation surge over the last four years has compounded the debt crisis. Higher borrowing costs mean the federal government’s interest payments are set to outpace national security spending—a worrying milestone for fiscal policy.

Bipartisan Gridlock Threatens Progress

Congress remains deeply divided on how to address the debt ceiling.

Hardline Republicans are pushing for drastic spending cuts, while Democrats advocate raising or eliminating the cap altogether.

This partisan stalemate raises the risk of protracted negotiations and financial instability.

Can the 14th Amendment Solve the Crisis?

Some Democrats have suggested invoking the 14th Amendment to bypass Congress and ensure the U.S. continues to pay its debts. President Biden floated this idea during previous debt ceiling debates, but its legality remains untested.

Will Congress Heed Yellen’s Warning?

With time running out, lawmakers face immense pressure to act. Failure to address the debt ceiling could push the U.S. into uncharted economic territory, testing the resilience of its financial systems and global leadership.

The Road Ahead for Trump’s Fiscal Policy

The $36 trillion debt ceiling showdown underscores the peril of unresolved fiscal issues.

Yellen’s warnings are clear: without decisive action, the U.S. risks not only default but also a global economic fallout.

As the debt ceiling fight looms, Trump faces a pivotal decision: will he champion his unorthodox call to abolish the borrowing cap or bow to pressure from fiscal conservatives within his own party?

Whatever path he chooses, the stakes for the U.S. economy—and his administration—are enormous.

The clock is ticking, and the world is watching.

Like Financial Freedom Countdown content? Be sure to follow us!

Retirement Is Overrated: 10 Reasons Not To Retire

You might be thinking that retirement sounds excellent – but what if you can’t afford it? What if an unforeseen catastrophe occurs and you need money? The reality is that so many people are retiring later in life because they don’t have enough saved up or can’t afford to take the risk of quitting their job before they know how much money they’ll need each month. Retirees also face many challenges, from loneliness to boredom, but there are ways to combat these problems with the right lifestyle changes. We will discuss why retirement isn’t always as glamorous as it seems and how to avoid these pitfalls by pursuing your goals now!

Retirement Is Overrated: 10 Reasons Not To Retire

Discover the Top 10 U.S. Cities Where Renters’ Income Goes the Furthest

With housing affordability at an all-time low, many Americans are forced to rent. While certain cities offer a higher income potential, they also have higher living cost. For renters, the optimal solution often lies in finding a middle ground — achieving the perfect balance between income and expenses. Luckily, individuals in search of apartments can now make informed decisions by exploring the latest report on RentCafe.com, which identifies cities where they can maximize the value of their budget. Here are the top 10 cities where renters can stretch their dollars.

Discover the Top 10 U.S. Cities Where Renters’ Income Goes the Furthest

Comparing Retirement Ages: How Does the US Stack Up Against Other Countries?

Retirement age fluctuates across nations, influenced by diverse factors such as labor market dynamics, job types, economic policies, gender roles, and pension systems. For instance, Saudi Arabia stands out as the sole country offering full retirement benefits to individuals under 50, whereas in 2023, France faced uproar after raising its retirement age by two years, sparking widespread strikes. The Organization for Economic Co-operation and Development (OECD) collects and analyzes retirement data using distinct metrics: – The Current Retirement Age signifies the age at which individuals can retire with full pension benefits after a career starting at age 22, without facing any deductions. – The Effective Retirement Age represents the average age at which workers aged 40 or older exit the workforce, influenced by personal decisions or job availability.

Comparing Retirement Ages: How Does the US Stack Up Against Other Countries?

The 10 States Taxing Social Security in 2024 and the 2 That Just Stopped

While many bask in the belief that their golden years will be tax-friendly, residents in ten specific states are facing a reality check as their Social Security benefits come under the taxman’s purview. Conversely, a wave of relief is set to wash over two states, marking an end to their era of taxing these benefits. This shift paints a complex portrait of retirement planning across the U.S., underscoring the importance of staying informed of the ever changing tax laws. Are you residing in one of these states? It’s time to uncover the impact of these tax changes on your retirement strategy and possibly reconsider your locale choice for those serene post-work years. Here are the states taxing social security benefits.

The States Taxing Social Security in 2024 and the 2 That Just Stopped

Avoid These Costly IRA Mistakes Before They Wreck Your Retirement

Individual Retirement Accounts (IRAs) are one of the most important tools for securing a financially stable retirement. With contribution limits for tax year 2024 set at $7,000 ($8,000 for those over 50), these accounts are accessible to most Americans for retirement planning.

Yet, despite their relative simplicity, there are plenty of pitfalls investors face when managing their IRAs. Whether it’s choosing the wrong type of IRA, mishandling withdrawals, or misjudging tax implications, these mistakes can lead to unnecessary costs and missed opportunities. Here are some of the most common errors and how to avoid them.

Avoid These Costly IRA Mistakes Before They Wreck Your Retirement

Did you find this article helpful? We’d love to hear your thoughts! Leave a comment with the box on the left-hand side of the screen and share your thoughts.

Also, do you want to stay up-to-date on our latest content?

1. Follow us by clicking the [+ Follow] button above,

2. Give the article a Thumbs Up on the top-left side of the screen.

3. And lastly, if you think this information would benefit your friends and family, don’t hesitate to share it with them!