The national debt of the United States, a colossal figure hovering around $34 trillion, has finally stopped being politely ignored in boardrooms and on Wall Street. The alarm bells are ringing, with financial giants like JPMorgan Chase’s Jamie Dimon calling it a “rebellion waiting to happen,” and Bank of America CEO Brian Moynihan urging Washington to confront this elephant in the room.
Moynihan’s call to action echoes Jerome Powell’s recent plea for an “adult conversation” about fiscal responsibility. Imagine, the head of the Federal Reserve pleading for grown-up behavior! It’s clear the situation is serious. After all, this ballooning debt translates to a hefty $100,000-plus tab for every U.S. citizen, raising concerns about public spending, national security, and our collective financial future.
Former House Speaker Paul Ryan aptly described the debt issue as a “predictable crisis,” and frankly, it’s hard to disagree. Dimon and Moynihan are joining a chorus of voices demanding action. Moynihan, on Teneo’s Insight Series podcast, emphasized the global need to address debt levels as a percentage of GDP.
Now, let’s not sugarcoat it – slashing spending in Washington is about as easy as herding cats. Moynihan acknowledges the unavoidable nature of some recent expenses, like the CARES Act’s pandemic relief package and the CHIPS Act’s investment in semiconductor manufacturing. These were necessary Band-Aids, but they can’t become the norm.
“In COVID, you had to find a way to keep the economy afloat when you told people to stay home,” Moynihan says. “But then you have to back out and let the free market take the reins again. That’s where I get worried.”
This concern is warranted. While government spending has its place, Moynihan, overseeing a whopping $8.4 billion in asset flows at Bank of America, believes the private sector holds the key to tackling societal challenges. “The private sector has the brains, the money, the time, and the commitment to do it,” he argues. Governments, he says, simply don’t have the financial muscle, and while charities are valuable, their impact pales in comparison to the resources the private sector can mobilize.
So, what’s the takeaway? Ignoring the debt is no longer an option. As Moynihan puts it, “people can admire the problem or do something about it.” It’s time for an “adult conversation,” a bipartisan effort to bend the spending curve and ensure a brighter financial future for the nation. This won’t be an easy feat, but it’s a necessary one. Let’s hope our elected officials can rise to the challenge, or risk facing the consequences of inaction – a future where even the mightiest military might struggle to compete with the weight of its own debt.
