High Level of U.S. Debt Sets Stage for Dangerous Economic Situation

A huge amount of cash was injected into U.S. markets as a result of the “enormous amount of debt that the U.S. has taken out since the pandemic, including around a trillion distributed in stimulus checks and the $4 trillion doled out by the Federal Reserve to buy government bonds.” According to JPMorgan’s Jamie Dimon, these actions led to more company profits and rising stocks in 2021, and ultimately inflation that prompted the Federal Reserve to “apply the brakes on ultra-loose monetary policy,” resulting in “stocks struggling in 2022 and markets seeing big bouts of rate-fueled volatility throughout 2023.” Despite efforts by the Fed to tame current inflation, Dimon anticipates that it is likely to remain elevated, partly due to high levels of government spending. The nation’s current record high $33 trillion total debt pile is “edging closer to $34 trillion as lawmakers spar over the federal budget.” Elevated concerns exist among economists of the U.S. potentially defaulting on its debt in 20 years if the U.S. doesn’t change course — a situation, should it come to pass, that “could end up having catastrophic consequences on the U.S. economy.”

Source:    https://www.yahoo.com/finance/news/jpmorgan-boss-jamie-dimon-says-025506966.html