Jamie Dimon estimates that the country's debt ratio could reach 130% by 2035
The bank CEO JP MorganJamie Dimon, said that the “the debt/GDP ratio [Produto Interno Bruto] of the United States looks like a hockey stick graphic”. In other words, it is a graph that rises abruptly. The statement was made on Friday (26 January 2024), during a debate in Washington with the Bipartisan Policy Center.
The expert also said at the event that the country's debt ratio could reach 130% by 2035. “That hockey stick hasn’t started yet […] We have a little time. But when it starts, markets around the world will revolt.”he stated.
Currently, the US debt-to-GDP ratio is around 120%, according to data from the Federal Reserve Bank of St. Louis. Meanwhile, the country's debt already exceeds US$34 trillion.
Jamie Dimon highlighted how much the United States' fiscal situation has worsened since he finished high school, when the debt-to-GDP ratio was around 35%.
“At that time, the deficit in periods of recession, that is, when money is spent in times of crisis, was around 4 or 5%”he stated. “Today, it is 6.5% in periods of growth”, he added.
In this scenario, the Congressional Budget Office estimated that interest payments on US debt could exceed total government revenues by 2030.
However, Jamie Dimon fears this will reduce spending in other areas, including defence, warning that this would pose a risk “for the security of the world” and stating that “We need a stronger military, a stronger America, and we need it now”.
With information from Investing.
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