JPMorgan’s Jamie Dimon and warns about US national debt problem, says ‘should be concerned’

Goldman Sachs CEO David Solomon recently expressed his concerns that mounting US government debt will pose more of a problem if the economy does not grow faster. David Solomon voiced his concerns on $38 trillion national debt problem, joining the ranks of JPMorgan CEO Jamie Dimon, Fed chair Jerome Powell, Bridgewater Associates founder Ray Dalio, and increasingly, politicians on Capitol Hill. The US national debt recently hit $38 trillion.

He said that the primary concern is not the sheer volume of debt but the worsening debt-to-GDP ratio, adding that the solution lies in accelerating economic growth which can be possible by artificial intelligence (AI) technology.

If we continue on the current course, and we don’t take the growth level up… there will be a reckoning,” Solomon told the Economic Club of Washington. Speaking at the Economic Club of Washington, D.C., the banking titan noted: “The path out is a growth path. The difference between compounding growth of 3% and 2% is monstrous in terms of dealing with this issue, so there’s a lot of discussion about running … real growth play.

I think we have some things that are going to give us a better opportunity to have a higher growth trajectory, particularly … technology, AI getting embedded into the enterprise, and the productivity opportunity from that,” he added. “But if we continue on the current course, and we don’t take the growth level up, there will be a reckoning.”

“We should be concerned about this, not sounding an alarm bell,” he said. “But I do think over time, this is an issue.” “The pandemic played an accelerating role, and it doesn’t seem like we have the ability to pull it back. And so we took in the debt in the last 15 plus years, and since the financial crisis, from $7 trillion to $38 trillion.”

The US economy has been in pretty good shape, minimizing chances of a recession in the near term, Solomon said. Despite concerns about the US dollar’s role weakening in the economy, he does not see its status eroding as the global reserve currency. “When you get around the world, and you look at all the capital flows around the world, global allocators, 50% of their capital is coming into the US,” he said.

They might be hedging the dollar a little bit differently now than they might have been for the last few years, but I think it’s more at the margin… it’s something to watch. But I’m not concerned that there’s some fundamental shift.”