America Risks ‘Severe, Irreversible Scars’ Over National Debt Insolvency
National debt is fast becoming the thorn in the side of the American economy that nobody wants to extract—and it will continue to cause damage, sending the US into financial crisis and 10 years of stagnation.
That is increasingly the opinion of a growing number of experts who are sounding the alarm over the pace at which the U.S. government is gathering debt. More important, they fear this debt will mean the country will not be able to afford necessary borrowing in the future, in addition to the funds needed to service existing debt.
Among the ranks of those in the concerned camp are Fed Chairman Jerome Powell, JPMorgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan, BlackRock CEO Larry Fink, and Wharton vice dean Joao Gomes.
Their outlook is evidenced by a March report from the Congressional Budget Office (CBO). The CBO estimates that (if America still exists as a nation state, that is) by 2054 public debt will represent 166% of GDP, reaching $141.1 Trillion.
Currently the nation’s $34 trillion debt making up approximately 99% of America's GDP. In other words America produces far more debt than domestic industrial production.
The report goes on to add that the likelihood of a financial crisis is increasing as a result of growing debt, something which would cause interest rates to spike and, if paired with higher inflation, “could erode confidence in the U.S. dollar as the dominant international reserve currency.”
The outlook from the U.S. Government Accountability office (GAO) isn’t much better. A report released last month said the government is facing an “unsustainable” fiscal path that poses a “serious” threat to economic, security, and social issues if unaddressed.
As evidence of a fantastically complex fallout piles up, one might assume it will take an equally complicated approach to prevent it. Economists say that’s not the case Post too long. Click here to view the full text.
