Strategy for Treasury Debt Crisis

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Yellen's Politicization of the Treasury Sets Stage for Debt Crisis

Recent actions by Treasury Secretary Janet Yellen raise serious concerns about the intentional politicization of the U.S. Treasury to create a manufactured debt crisis. By significantly reducing the federal government’s cash reserves in the months leading up to January 2025, Yellen appears to be setting the stage for a financial showdown as the debt ceiling snaps back into effect.

Under the terms of the deal negotiated in 2023 by then-Speaker Kevin McCarthy, the Biden administration was granted unlimited borrowing authority until January 1, 2025. However, rather than using this window to build a healthy cash reserve, Yellen has maintained unusually low cash balances, leaving the incoming Trump administration and GOP-controlled Congress with limited flexibility.

9 Trillion in Debt Must be Refinanced in 2025