Jamie Dimon sounds the alarm about the ‘potentially disastrous consequences’ of rising US debt


JPMorgan Chase CEO Jamie Dimon focused on fiscal policy amid the new Congress and raised concerns about the growing macroeconomic impact of debt in an exclusive four-part interview airing Tuesday on “Mornings With Maria.”

The U.S. government debt is $31 trillion, and while it’s not a “problem today,” Dimon says trying to pay it off someday will be a “hockey stick” on the economy and Americans’ pockets.

“I’m talking about the day when America can’t pay its debt, which could have potentially catastrophic consequences. Once America’s debt defaults, a lot of people can no longer own it, and America’s debt doesn’t default, but it’s cumulative,” CEO Maria Bartiromo told host.

“The [Treasury bill] defaults and next week Treasury defaults, next week Treasury defaults, pension plans should be sold,” Dimon continued. “It’s so potentially dangerous that we shouldn’t go near it. And after all the machinations of politics, we will have to fix it. I think it is very bad for the nation to constantly watch this type of thing.”

JPMORGAN’S JAMIE DIMON is more optimistic about US consumers.

Dimon later expressed concern about America’s fiscal regulatory system, but argued that “strong” consumer sentiment and balance sheets, combined with the “right” policies, could help the economy grow by 3%.

Jamie Dimon, chairman and CEO of JPMorgan Chase, said in an exclusive interview on “Mornings with Maria” that the rising U.S. debt has “potentially catastrophic consequences.” (Getty Images)

“I’m a little more concerned about the regulatory system, the judicial system, the regulatory system in America. We’re slowing down the formation of businesses, the growth, the permitting of infrastructure projects. Infrastructure projects don’t have to take five or seven years,” CEO of JPMorgan Chase he claimed. “So imagine if you’re going to invest $1 billion in offshore wind and you suddenly think you can do it in two years, but it’s going to be 7-10 and you don’t know and you have to have a lot of litigation aside, 1 will you see a billion dollars?

One problematic system is U.S. energy, according to Dimon, who has doubled down on support for domestic producers to invest in more pipeline and drilling permit plans. During a House Financial Services Committee hearing last year, the CEO said that cutting off funds for new oil and gas products would be “a road to hell for America.”

“I believe we need to do things about climate, about CO2, but it’s not as simple as just stopping funding them,” Dimon said. “If I can stop funding a good oil company, that’s not going to help. We need pipelines, permits. We can’t even get solar permits…we need a very comprehensive policy, and I don’t think we have that right yet.” I think we spend too much time yelling and screaming at each other, as opposed to what we need to do to achieve these very important goals of climate sustainability and resilience, efficient and effective oil pricing and delivery. .”

Dimon explained that he is not clearly blaming or endorsing one party over the other, but that the newly sworn-in Congress must advance other “competent” policies on education, health care, infrastructure and even immigration.

“We need an immigration policy. We need to stop illegal immigration. We need more legal immigration,” the CEO said. “I would have a heart for DACA and things like that. So if we do these things right, we’ll grow 3%.”

Rising interest rates and an unwinding of balance sheets from the Federal Reserve could also create an economic “trouble,” according to Dimon. The Fed has indicated that it will remove 2 or 3 trillion dollars from its balance sheet by selling securities.

“At some point, it could cause all this volatility in the markets and things like that. They’ll deal with it when they get there,” Dimon said. “And part of it is rules and regulations, part of it is money, part of it is fiscal stimulus. It’s kind of a complicated thing. But at some point I expect they’re going to have a problem.”

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Dimon noted that preparing for an economic “crisis” means stocking up on the best weapons in your personal arsenal to counter policy-induced economic volatility.

“In terms of a crisis, it’s better for the military to deal with it beforehand, have the right margins, the right calculations, and then when they happen, you’d better move very quickly and do the right thing,” he said. “It’s the kind of thing that Warren Buffett refers to, it doesn’t go backwards, it may stop moving forward sometimes, but it’s always growing and innovating. And part of that is this pretty booming economy that we have to make sure stays prosperous.”

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