The United States' current borrowing trajectory will place an "undue burden on future generations," an economic think tank has warned, with younger generations facing a higher interest rate environment, slower economic growth, and stalling wage increases. The latest research from the American Action Forum chimes with concerns across both the public and private sectors. Everyone from JPMorganChase CEO Jamie Dimon to Fed chairman Jerome Powell is nervously eyeing the nation's $38 trillion debt burden.
One way or another, U.S. debt will stop expanding unsustainably, but the most likely outcome is also among the most painful, according to Jeffrey Frankel, a Harvard professor and former member of President Bill Clinton's Council of Economic Advisers. Publicly held debt is already at 99% of GDP and is on track to hit 107% by 2029, breaking the record set after the end of World War II. Debt service alone is more than $11 billion a week, or 15% of federal spending in the current fiscal year.