Treasury Secretary Janet Yellen Tuesday warned that a U.S. default on government debt would leave millions of Americans without income payments, potentially triggering a recession that destroys many American jobs and businesses.
Yellen told a gathering of community bankers that the unprecedented economic and financial crisis would be exacerbated by possible disruptions to the federal government’s 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 we'd see a number of financial markets break — with worldwide panic triggering margin calls, runs and fire sales."