By Janet Yellen

Congress has raised or suspended the country’s debt ceiling about 80 times since 1960. Now it must do so again. If not, sometime in October—it is impossible to predict precisely when—the Treasury Department’s cash balance will fall to an insufficient level, and the federal government will be unable to pay its bills.

The U.S. has always paid its bills on time, but the overwhelming consensus among economists and Treasury officials of both parties is that failing to raise the debt limit would produce widespread economic catastrophe. In a matter of days, millions of Americans could be strapped for cash. We could see indefinite delays in critical payments. Nearly 50 million seniors could stop receiving Social Security checks for a time. Troops could go unpaid. Millions of families who rely on the monthly child tax credit could see delays. America, in short, would default on its obligations.

The U.S. has never defaulted. Not once. Doing so would likely precipitate a historic financial crisis that would compound the damage of the continuing public health emergency. Default could trigger a spike in interest rates, a steep drop in stock prices and other financial turmoil. Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.

We would emerge from this crisis a permanently weaker nation. For about a century, America’s creditworthiness has been a major advantage over our economic competitors. We can borrow more cheaply than almost any other country, and defaulting would jeopardize this enviable fiscal position. It would also make America a more expensive place to live, as the higher cost of borrowing would fall on consumers. Mortgage payments, car loans, credit card bills—everything that is purchased with credit would be costlier after default.

There is no valid reason to invite such an outcome, certainly not fiscal responsibility, the most commonly stated reason. Raising the debt ceiling doesn’t authorize additional spending of taxpayer dollars. Instead, when we raise the debt ceiling, we’re effectively agreeing to raise the country’s credit card balance, and in this case, 97% of that balance was incurred by past congresses and presidential administrations. Even if the Biden administration hadn’t authorized any spending, we would still need to address the debt ceiling now.

Paying America’s bills shouldn’t be a controversial issue, and during the previous administration Congress suspended the debt ceiling three separate times with bipartisan support and without much fanfare. For this reason, I’m confident our lawmakers will address the debt ceiling once again, but they must act quickly.

There is a big difference between avoiding default by months or minutes. We saw that in 2011 when debt-limit brinkmanship pushed America to the edge of crisis. America’s credit rating was downgraded, and there was a severe stock market downturn. This led to financial-market disruptions that persisted for months. Time is money here, potentially billions of dollars.

Neither delay nor default is tolerable. The past 17 months have tested our nation’s economic strength. We are just now emerging from crisis. We must not plunge ourselves back into an entirely avoidable one.

Ms. Yellen is U.S. Treasury secretary.

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