The U.S. had a national debt ‘home run’ in its grasp, says Jamie Dimon. But the government did nothing, and now its best option is crisis management
The U.S. national debt stands at more than $39 trillion, with interest paid on the debt now amounting to more than $1 trillion a year. Before too long, that figure will double.
What this borrowing (and its related interest payments) will ultimately mean for the economy remains to be seen: Theories range from a market “reckoning” 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.
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—but he is certain that the nation’s fiscal trajectory cannot be ignored forever.
“The best way to deal with the problem is to actually deal with the problem—to acknowledge it, to work on it,” Dimon told NPR’s Newsmakers podcast. “Years ago, we had a solution, the Simpson-Bowles Commission. It didn’t get done. I wish it had gotten done. It would have been a home run for all of Americans, and it would have resolved some of these issues.”
Dimon was referring to the work of President 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.
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.
Dimon highlighted that a vast chunk of government spending (and hence, borrowing) is “set in stone” because it relates to Medicare, Medicaid, and Social Security. According to the Congressional Budget Office’s most recent full-year calculations, this mandatory spending accounted for $4.2 trillion of a total $7 trillion in spending for 2025.
“I think we should work on it, but I don’t know—and again, I don’t think anyone can predict: Does it become a real problem in six months, six years? I don’t know. I do know it will become a problem, and the way it would exhibit itself is volatile markets, rates going up … bond vigilantes, people not wanting to buy United States Treasuries; [the U.S.] will still be the best economy, but they’ll not want to own U.S. Treasuries,” Dimon explained. “So we should deal with it sooner than later maybe, and if it gets done that way, it’ll be kind of crisis management, which we’ll get through—it’s just not the right way to do it.”
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