Fed Chairman Powell says he is 'very worried' about growing amount of US debt

Discussion in 'Politics' started by Tony Stark, Jan 11, 2019.

  1. Tony Stark

    Tony Stark

    https://www.cnbc.com/2019/01/10/fed...-worried-about-growing-amount-of-us-debt.html

    Fed Chairman Powell says he is 'very worried' about growing amount of US debt

    • "I'm very worried about it," Fed Chairman Powell said Thursday. "It's a long-run issue that we definitely need to face, and ultimately, will have no choice but to face."
    • Total U.S. debt is about $21.9 trillion, of which $16 trillion is owed by the public. The sustained annual U.S. deficit is now believed to be more than $1 trillion.
    • In part because of continued rate increases under Powell, the interest cost on that debt could start to become a bigger and bigger burden.
    Thomas Franck | @tomwfranck

    Published 14 Hours Ago Updated 9 Mins Ago

    Federal Reserve Chairman
    Jerome Powell is concerned about the ballooning amount of United States debt.

    "I'm very worried about it," Powell said at The Economic Club of Washington, D.C. "From the Fed's standpoint, we're really looking at a business cycle length: that's our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn't really something that plays into the medium term that is relevant for our policy decisions."

    However, "it's a long-run issue that we definitely need to face, and ultimately, will have no choice but to face," he added.

    The Fed chief's comments came as the annual U.S. deficit reaches new sustained highs above $1 trillion, a fact many economists worry could spell trouble for future generations. Annual deficits have topped $1 trillion before, but never during a time of sustained economic growth like now, raising concern about what would happen if a recession hits.

    Total U.S. debt is about $21.9 trillion, of which $16 trillion is owed by the public. In part because of continued rate increases under Powell, the interest cost on that debt could start to become a bigger and bigger burden.

    Wall Street's "bond king" and respected financial prognosticator Jeffrey Gundlach said in December that the Fed seems to be on a "suicide mission," raising rates while the government deficit increases as a share of GDP. Normally when the deficit is expanding, the Fed would be lowering interest rates.

    Gundlach added that the economy appears to be slowing "and maybe the supply makes it so rates don't go down with economic weakness."

    Fitch Ratings — one of the top credit rating agencies that analyzes companies and governments alike — said Wednesday that the ongoing government shutdown could soon start to impact its ability to pass a budget and could impact the government's triple-A sovereign score.
     
    Last edited: Jan 11, 2019
  2. Tony Stark

    Tony Stark

    Under Obama


    Federal Deficit to Plunge to $514 Billion

    [​IMG]
    Paul Ausick
    24/7 Wall St.

    February 4, 2014

    The U.S. Congressional Budget Office (CBO) released its Budget and Economic Outlook: 2014 to 2024 Tuesday morning. The non-partisan CBO now estimates that the federal budget deficit in fiscal year 2014 will total $514 billion, less than half the $1.4 trillion federal deficit in 2009. The estimated deficit represents about 3% of U.S. gross domestic product (GDP), roughly the average percentage over the past 40 years.

    The CBO also forecasts a further drop in the deficit for fiscal year 2015, which begins on October 1, 2014. The deficit is forecast at $478 billion, or 2.6% of GDP. The CBO estimates that federal debt held by the public will equal 74% of GDP at the end of the 2014 fiscal year and grow to 79% of GDP by 2024.
     
  3. exGOPer

    exGOPer

    He should relax, Trump has a plan

     
  4. lylec305

    lylec305

    Now he's concerned hahaha. FYI it's been growing for years. But it's Trump's fault obama grew deficit.
     
  5. Tony Stark

    Tony Stark

    Obama cut the deficit in half.Trump has increased it from 600 billion to a trillion.
     
  6. Tsing Tao

    Tsing Tao

    Please give it a rest, Tony. Powell wasn't concerned about the deficit, he is concerned about the amount of debt.

    And while Trump will, no doubt, exacerbate the issue, Obama did more than his fair share at adding onto the pile:

    [​IMG]

    It should also be noted that the suppression of interest rates - which you can place solidly at the foot of the Federal Reserve - enabled this binge of debt consumption. Powell is nothing more than the latest in a line of custodians who failed to properly manage the economy.