Yellen to Congress: You have until October on the U.S. debt limit – or else

Treasury Secretary Janet Yellen is sounding the alarm bells over America’s debt problems.

And not in a fiscally conservative manner, either.

In a letter to lawmakers, the former head of the Federal Reserve warned there is a chance of a U.S. default that could have drastic consequences for the broader economy. She added that the Treasury could run out of its extraordinary measures to prevent the ship from sinking.

The deadline? Sometime in October.

“A delay that calls into question the federal government’s ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets.

We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can 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.”

When asked about the letter, House Speaker Nancy Pelosi (D-CA) assured everyone that the Democrats will not risk “the full faith and credit” of the U.S. government.

As usual, it is all a dog and pony show. The Congressional Budget Office (CBO) estimated in July that the new cap will likely come in just north of $28.5 trillion.