Tuesday, April 28, 2026

Dimon on Risk of a Debt Crisis

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
https://finance.yahoo.com/economy/policy/articles/u-had-national-debt-home-104852574.html

  • Global deficits are significantly elevated, particularly during what has been a relatively healthy global economy and, until recently, a time of peace — the deficit globally is at an extremely high 5%, while global sovereign debt is at all-time highs. The current forecast from the Congressional Budget Office has our debt-to-GDP ratio going from 100% today to 120% in 2036. High government debt is somewhat offset by low consumer debt, which was nearly 100% of GDP in 2007 and is now below 70%. Similarly, corporate debt is at a fairly normal healthy level of 45%. High and increasing government debt will eventually have to be dealt with — the right way would be to deal with it now before it becomes a problem; the wrong way would be to let it become a crisis, which, in my opinion, is probably the likely outcome. Importantly, almost 60% of government spending is for entitlements and is not discretionary. This makes the job that much harder. A crucial note on the importance of growth: If interest rates went down 100 basis points and GDP grew at 3%, the debt-to-GDP ratio could actually start to go down instead of going up.


  • If you take the long view, America’s economic outlook is pretty bleak. Like a lot of rich countries, it is overwhelmed by debt it has no plans to reduce. Even more troubling is its aging population, which will reduce growth and leave fewer people to pay all that debt. There is only one hope: a sudden increase in productivity that will boost growth so much it will pay for everything. As it happens, that is precisely the promise, or one of them, of AI. But what are the chances of it coming true?

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