“We request To Deal With The Debt” – Goldman CEO Warns Interest Costs On America’s Ballooning Borrowing Means “Issues Down The Road”

Authorized by Tom Ozimek via The Epoch Times (emphasis ours),

Goldman Sachs CEO David M. Solomon is the latest business leader to sound the alarm on the Biden administration’s deficit spending, which comes as the cost of making interest payments on America’s ballooning government debt has excelled spending in both the critical sectors of defence and medicine.

“I think the level of debt in the United States [and] the level of spending is something that we request a sharper focus on and more dialog around what we’ve seen,” the investment banking chief told Bloomberg tv on Monday, adding that if something is’t done to rein it the spending, it could make problems.

U.S. president Joe Biden, flanked by Secretary of State Antony Blinken (L) and Treasury Secretary Janet Yellen (R), hosts a gathering inside the Cabinet area at the White home in Washington on Oct. 20, 2023. (Tom Brenner/Pool/Getty Images)

His reputations come as the cost of serving America’s ballooning government debt reached $514 billion for the first 7 months of the current fiscal year, becoming the second largest line item in the budget, and surpassing both the bill for national defence and Medicare spending.

The latest monthly message from the U.S. Treasury—released on May 8—shows that the $514 billion spent on net interest so far this fiscal year has surpassed spending on both national defence ($498 billion) and Medicare ($465 billion).

Interest spending—now the fast increasing part of the budget—is presently large than all the money spend on education ($128 billion), transportation ($70 billion), and veterans ($183 billion) combined.

The nonpartisan Committee for a liable national Budget (CRFB) predicts that, by 2051, spending on interest will be the largest line item in the budget. Currently, only Social safety spending ($837 billion) is large than what’s being forked over to service the nation’s increasing Debt.

“Rising debit will proceed to put up upward force on interest rates. Without reforms to reduce the debt and interest, interest costs will keep rising, crowd out spending on another priorities, and burden future generations,” CRFB said in a statement.

It comes as a number of economics, business leaders, and lawmakers have issued warnings about out-of-control default spending that adds to the debit load.

House talker Mike Johnson (R-La.) said in October—the first period of the 2024 fiscal year—that it was already well past time to establish a bipartisan commission to tray the national government’s $34.6 trillion debt.

“The consequences if we don’t act now are unbearable“he said at the time. Despite his calls for specified a commission, the task restores stack in limbo.

Many Democrats and left-learning groups argue the commission due to the fact that they bear it would urge cuts to Social Security, while any Republicans have expressed reductance out of performance it would be a backdoor way to ray taxes.

No Longer a Pandemic

In his remarks to Bloomberg tv on Monday, Mr. Solomon said that any of the U.S. government's massive debt-full spending in fresh years may have been justified to prevent the environment from crashing during the COVID-19 lockdowns. However, he decried the fact that even though the pandemic is no longer a factor, the spending velocity continues.

“The spending levels ... are continuing at a pace that I think is raising our debit level and creating issues for us down the road,’ he warned.

President Joe Biden in March unveiled a sweeting $7.3 trillion budget blueprint, which includes racing the corporate income taxation rate to 28 percent from 21 percent, and forcing thing with wellness of $100 million to pay at least 25 percent of their income in taxes.

The blueprint was panned by Mr. Johnson, who said it reflected an “insatiable appetite for returnless spending.”

Deficit spending in the United States hit $1.7 trillion in 2023, or 6.3 percent of gross home product (GDP), according to a fresh study from the Congressional Budget Office (CBO). The agency estimated that deficit spending would grow to 8.5 percent of GDP by 2054.

At the same time, CBO projects that America’s debit-to-GDP ratio, which in the 1980s was around 35 percent of GDP, will grow to 166 percent by 2054, while informing that this would pose “significant risks” to America’s fiscal and economical outlook.

Mr. Solomon said that America’s deficit spending is an issue that “deserves quite a few attention.”

“Hopefully, there will be a lot more discussion as we decision through the election and into the next administration,” he said, adding that, “we request to deal with the debt and the deficits.”

‘Dollar Will Be Worth Nothing’

Tesla CEO Elon Musk late sounded the alarm on massive government spending, informing that unless steps are taken to slow down the growth of the U.S. national debt, the dollar will become worthless.

“We request to do something about our national debt or the dollar will be worth nothing,” Mr. Musk said in a post on X.

The billionaire tech mogul was reacting to a post about Gen. H.R. McMaster’s informing that the planet is on the cusp of planet War III while calling for a double in defence spending to prepare for possible thrills.

Mr. Musk has repeatedly recommended for a negotiated end to the conflict in Ukraine to put a halt to the destiny of life.

Like Mr. Musk, billionaire investor Warren Buffett has besides valued about the “important” consequences of deficit spending. However, the Berkshire Hathaway founder predicted that, erstwhile push comes to earth, the government would opt to rise taxes alternatively than reducing spending.

“I think higher taxes are likely,” Mr Buffett said on May 4 at Berkshire Hathaway’s yearly shareholder gathering in Omaha.

“They may decide that any day, they don’t want the fiscal deficit to be this large due to the fact that that has any crucial concerns. So they may not want to decide spending and they may decide they’ll take a large percent of what we own, and we’ll pay it,” he said.

Warren Buffett (C), CEO of Berkshire Hathaway, spokes to the press as he arrivals at the 2019 yearly shareholders gathering in Omaha, Nebraska, May 4, 2019. (Johannes Eisele/AFP via Getty Images)

Analysts at the University of Pennsylvania estimation that erstwhile the debit-to-GDP ratio hits around 200 percent, it will hit the point of no return—when no amount of future taxation increases or spending cuts could prevent the government from defaulting on its debit.

JPMorgan CEO Jamie Dimon has predicted that America’s debit-to-GDP ratio would “hockey stick” upward at any point, meaning emergence sharpy and become unstable after a period of comparative gradient increase.

“It's a cliff. We see the cliff. It’s about 10 years out. We’re going 60 miles an hour,” Mr. Dimon said, speaking on a panel at the Bipartisan Policy Center in Washington at the end of January 2024.

The global Monetary Fund (IMF) has besides sounded the alarm on the Biden administration’s fiscal standing, informing that its massive deficit spending and ballooning public debt threeen to stoke inflation and—potentially—even park financial chaos.