WASHINGTON, May 16 (Reuters) – Treasury Secretary Janet Yellen on Tuesday warned that a US default on its national debt would leave millions of Americans without income payments, potentially triggering a recession that would destroy many American jobs and businesses.
Yellen told a gathering of community bankers that the unprecedented economic and financial crisis would be exacerbated by potential disruptions to federal government operations, including air traffic control, law enforcement, border security and national defense, and telecommunications systems.
She said the accompanying financial crisis could multiply the severity of the downturn, adding: “It is very conceivable that a number of financial markets could collapse – with a worldwide panic triggering margin calls, runs and fire sales.”
Reporting by Andrea Shalal
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