Treasury Secretary Janet Yellen announced that her department had begun using extraordinary cash management measures to prevent a credit default until June 5th, but the clock is ticking. If Congress fails to increase the debt ceiling by the time the Treasury runs out of cash, then the US government could default on its loans for the first time in history, Ian Bremmer explains. Not only would this shake investor confidence in US bonds, raising the prospect of an American recession, but because US debt is the cornerstone of the world economy, it could also spark a global financial calamity.

So, what’s the holdup? Politics, of course. Republican House Speaker Kevin McCarthy, who handed the hard-right delegation of his party everything short of a kidney to secure his leadership role, is signaling that the only way Republicans will agree to increase the debt ceiling is if President Biden works with them on spending cuts in the federal budget—a budget that has grown nearly 30% over the last three years.