The United States needs to focus on reducing its fiscal deficit or it may become a “risky” problem in the future, JPMorgan Chase CEO Jamie Dimon said in an interview on Wednesday.
The chairman of the largest US bank echoed sentiments that have been expressed by other business leaders before. Investors, including famed investor Warren Buffett, have warned that the government may need to increase taxes to reduce the impact of excessive spending.
"Any country can borrow money and stimulate growth, but it may not always lead to good growth," said Dimon.
The sustainability of the United States' debt has been monitored for years, especially after the pandemic, when the government spent large amounts to stimulate the economy. Experts warn that debt taken on by the government could become problematic soon, worsening inflation and posing risks to the United States' credit rating.
“If we don't organize our finances, it will have a serious negative impact on economic growth and our long-term opportunities, causing chronic inflation,” said David Walker, former United States General Officer and Main Street Economics expert.
Congressional Budget Officials estimated in their latest long-term budget forecast that the federal deficit will increase to 8.5% of gross domestic output (KDNK) in fiscal 2054 from 5.5% in fiscal 2024.
If tax reductions introduced in 2017 are renewed, the deficit could decline further.
