Yellen: U.S. faces ‘widespread suffering’ if debt limit not raised

Treasury Secretary Janet Yellen on Tuesday warned of “widespread suffering” and a potential stock market crash if Washington fails to raise the government’s borrowing authority in the coming weeks.

Yellen told a banking conference that a situation where the U.S. runs out of cash to pay its bills and defaults on its debt “would generate an economic and financial catastrophe.” She said millions of Americans who rely on payments from the federal government would likely go unpaid, ranging from 66 million Social Security beneficiaries to millions of veterans and military families.

She said the ensuing economic crisis would be exacerbated by disruptions to the federal government’s operations, citing potential impacts on air traffic control and law enforcement. A number of financial markets would break, she added.