"Between Wall Street, retail investors, Ivy League economists, and Washington policymakers, you'd be hard-pressed to find someone who isn't nervous about America's national debt burden. Their concern is for the day when confidence in the bond market wanes, when buyers of America's borrowing question whether Uncle Sam can really pay his debts. Goldman Sachs CEO David Solomon is among those concerned about the U.S.'s $38 trillion national debt problem, joining the ranks of JPMorgan CEO Jamie Dimon, Fed chairman Jerome Powell, Bridgewater Associates founder Ray Dalio, and increasingly, politicians on Capitol Hill."
"This barometer indicates to the market how much the U.S. is adding to its debt obligations in relation to how quickly its economy is growing-and thus its ability to pay back the loans. At present, that balance sits at around 125% according to Treasury data, but is expected to hit 156% by 2055, according to the Congressional Budget Office (CBO)."
U.S. national debt stands near $38 trillion with a debt-to-GDP ratio around 125% and projected to rise to 156% by 2055 per the CBO. Market participants including major bankers and policymakers fear a future loss of confidence in the bond market if debt growth outpaces economic expansion. Reducing the debt-to-GDP ratio requires either spending cuts or faster GDP growth. Many view growth as preferable, with technological advances such as AI cited as drivers that could lift productivity and output. However, relying solely on growth may be optimistic and may not address structural fiscal overstretch.
Read at Fortune
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