US Debt Default Would Be Catastrophic, Could Cost American Dollar Reserve Currency Status: Congressman Jim Himes

According to Democratic Representative Jim Himes of the House of Representatives, the impending problem with the debt ceiling might threaten the role of the United States dollar as the reserve currency of the world.

In a recent interview with CNN, Congressman Himes stated that the United States of America has never been closer to defaulting on its debt than it is now.

Himes has stated that it might be “catastrophic” for the future of the United States and the dollar if the current impasse regarding the debt ceiling is not resolved.

Since the United States has never been in a position even somewhat close to defaulting on its debt, it is difficult for Americans to conceptualize what that might entail. Nevertheless, there is the possibility that it will be disastrous. 

To tell it like it is, the unwavering support and faith of the United States government are the cornerstones upon which the international monetary system is constructed. In the event that this is called into question, a wide variety of outcomes are possible. 

The value of the United States dollar and its status as the world’s reserve currency can decrease. People might decide to invest their money elsewhere, such as in the European Union or the United Kingdom, rather than in the United States. 

Himes is not the only government figure raising concerns about the impending problem of the debt ceiling. At the beginning of this month, Treasury Secretary Janet Yellen warned that the United States of America would be thrown into a “economic calamity” if Congress did not raise the debt ceiling.

Hillary Clinton, who served as secretary of state under the Obama administration, is likewise of the opinion that a “financial meltdown” might occur all over the world if the United States were to default on its obligations.