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What this borrowing (and its related interest payments) will ultimately mean for the economy remains to be seen: Theories range from a market \u201creckoning\u201d through to public investment being crowded out by spending on debt maintenance. Others suggest inflation will merely be allowed to rise, ultimately lowering the real value of the debt.<\/p>\n
JPMorgan Chase CEO Jamie Dimon, however, is alarmed: The Wall Street veteran knows better than to predict when the issue may come to a head\u2014but he is certain that the nation\u2019s fiscal trajectory cannot be ignored forever.<\/p>\n
\u201cThe best way to deal with\u00a0the problem is to actually deal with the\u00a0problem, to acknowledge it, to work on it,\u201d Dimon told NPR\u2019s Newsmakers podcast. \u201cYears ago, we had a solution,\u00a0the Simpson-Bowles Commission. It didn\u2019t\u00a0get done. I wish it had gotten done. It\u00a0would have been a home run for all of\u00a0Americans, and it would have resolved\u00a0some of these issues.\u201d<\/p>\n
Dimon was referring to the work of\u00a0President Obama, who oversaw the creation of the bipartisan National Commission on Fiscal Responsibility and Reform, commonly known as the Simpson-Bowles (or Bowles-Simpson) Commission. The ensuing report made several recommendations: cutting discretionary spending, reforming tax law, and reshaping health care spending.<\/p>\n
While many of the suggestions from the commission have proved a basis for policy arguments when it comes to government spending, none of the conclusions of the report were ever formally brought into law. <\/p>\n
Dimon highlighted that a vast chunk of government spending (and hence, borrowing) is \u201cset in stone\u201d because it relates to Medicare, Medicaid, and Social Security. According to the Congressional Budget Office\u2019s (CBO) most recent full-year calculations, this mandatory spending accounted for $4.2 trillion of a total $7 trillion spending for 2025.<\/p>\n
\u201cI think we should work on it, but I don\u2019t\u00a0know\u2014and again, I don\u2019t think anyone\u00a0can predict: Does it become a real\u00a0problem in six months, six years? I\u00a0don\u2019t know\u2014I do know it will become a\u00a0problem, and the way it would exhibit\u00a0itself is volatile markets, rates going up \u2026 bond\u00a0vigilantes, people not wanting to buy\u00a0United States Treasuries, [the U.S.] will still\u00a0be the best economy, but they\u2019ll not\u00a0want to own U.S. Treasuries,\u201d Dimon explained. \u201cSo we should\u00a0deal with it sooner than later maybe, and if it gets done that\u00a0way, it\u2019ll be kind of crisis management\u00a0which we\u2019ll get through\u2014it\u2019s just not\u00a0the right way to do it.\u201d<\/p>\n
A bipartisan issue<\/p>\n
Over the years, both Republicans and Democrats have failed to meaningfully address the issue.<\/p>\n
Proposals have been put forward by independent groups: The\u00a0Committee for a Responsible Federal Budget\u00a0has continually advocated for a federal unified budget deficit at or below 3% of GDP. (At the moment it\u2019s around 6%.) This idea has been backed by Rep. Bill Huizenga (R-Mich.) and Rep. Scott Peters (D-Calif.), the cochairs of the\u00a0Bipartisan Fiscal Forum. Indeed, the entire steering committee for the forum has supported the notion and introduced a\u00a0resolution\u00a0to that effect.<\/p>\n
\u201cNeither Democrats or\u00a0Republicans have really focused on this\u00a0for a while. It comes up all the time\u00a0and you talk and you walk the halls of Congress, I mean, almost everyone knows,\u201d Dimon added. \u201cIt\u2019s just we haven\u2019t had the will yet to\u00a0actually deal with it, and it\u2019s unfortunate because it can end up with a\u00a0real problem, worse than it would\u00a0otherwise have been. Good policy is\u00a0free.\u201d <\/p>\n
Indeed, economists and analysts aren\u2019t necessarily worried about the level of government debt, rather the debt-to-GDP ratio. Depending on who you ask, the debt-to-GDP ratio stands at around 122% of GDP at present. This measure demonstrates an economy\u2019s spending versus its growth, and the risk associated with lending to a nation that isn\u2019t growing fast enough to handle its spending. To rebalance that ratio, an economy could either cut spending or increase growth\u2014the latter being by far the less painful option.<\/p>\n
Dimon is bullish on the strength of the U.S. economy, saying it should aspire to hit 3% growth if not \u201ceven better than that.\u201d<\/p>\n
\u201cIf we grew at 3% and not 2% \u2026 the debt to\u00a0GDP would start going down,\u201d he added. \u201cThis is the most innovative\u00a0nation the world\u2019s ever seen. And so I\u00a0think we should focus a little bit in\u00a0that to solve the problem too, not just\u00a0raise taxes or cut expenditures.\u201d<\/p>\n
#Jamie #Dimon #home #run #national #debt #option #crisis #management<\/p>\n","protected":false},"excerpt":{"rendered":"
What this borrowing (and its related interest payments) will ultimately mean for the economy remains…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[245],"tags":[1243,1555,5526,7580,5081,232,586,5535,1728,1786,1610,1319,65],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/3383"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3383"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/3383\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}