JPMorgan Chase Chairman and CEO Jamie Dimon says the U.S. is accelerating toward a cliff as runaway U.S. debt continues to rise, and he said the country is accelerating toward a cliff before it reaches a crisis. It is sounding the alarm that something needs to be done about it.
The CEOs of the nation's largest banks were asked Friday for their views on what it would mean for the economy if the federal government fails to address the issue during a panel discussion at the Bipartisan Policy Center. issued a warning.
Mr. Dimon began by looking back at the economy in 1982, when inflation was about 12%, the prime rate was about 21.5%, unemployment was about 10%, and debt was about 35% of gross domestic product. He noted that the debt-to-gross domestic product (GDP) ratio currently exceeds 100% and is expected to reach 130% by 2035.
“And it's a hockey stick,” Dimon said, explaining how increased debt shows up on the graph.
He said the U.S. hasn't reached a “hockey stick” price spike yet, “but when it does, markets around the world — by the way, $7 trillion of U.S. government debt is owned by foreigners. –There will be a rebellion, and that's the worst way possible.”
“It's a cliff, and we see the cliff,” Dimon said. “In about 10 years, we'll be going 60 miles an hour.” [toward it]”
Mr. Dimon also agreed with panel member and former House Speaker Paul Ryan, who called the snowballing debt “the most predictable crisis ever.”
The outlook for federal debt levels is bleak, and economists are sounding the alarm over the breakneck pace of spending by Congress and the White House.
The latest findings from the Congressional Budget Office show that the national debt will nearly double over the next 30 years. By the end of 2022, the national debt had increased to about 97% of gross domestic product. Under current law, this figure will take the debt burden far above previous levels, which is expected to jump to 181% by the end of 2053.
If this debt materializes, it could jeopardize America's economic standing in the world.
FOX Business' Megan Henney contributed to this report.
