JPMorgan Chase CEO Jamie Dimon on Wednesday repeated his warning that the U.S. needs to get its fiscal house in order before the nation's budget shortfalls result in a crisis.
"America spent a lot of money during COVID and after COVID and our deficit is 6% – now, that's a lot, but obviously that drives growth," Dimon said during an interview with the U.K.'s Sky News. "So any country can borrow money and drive some growth, but it may not always lead to good growth. So I think America should be quite aware that we've got to focus on our fiscal deficit issues a little bit more, and that is important for the world."
The head of America's largest bank said he did not expect a "big comeuppance" over the next couple of years, but pointed to runaway spending as the reason the U.S. has experienced higher inflation that is still sticking around.
"I think if you want to do a great job and your country, and you have a 6% deficit, and 100% debt-to-GDP, this can go on for a while, but the sooner we focus on it, the better," Dimon said. "So I'm hoping that the government really focuses on how can we reduce that deficit and still have good growth, and how can we reduce that deficit?"
"At one point, it will cause a problem, and why should you wait?" he continued. "Because the problem will be caused by the market, and then you'll be forced to deal with it – and probably in a far more uncomfortable way than if you had dealt with it to start."
SOARING DEFICITS TO PUSH PUBLICLY HELD DEBT TO RECORD LEVEL IN 4 YEARS
Dimon warned earlier this year that the U.S. is driving toward a cliff as its debt snowballs.
During a panel discussion at the Bipartisan Policy Center, Dimon noted that the debt-to-GDP ratio is projected to hit 130% by 2035, describing how the expectation of debt growth looks like a hockey stick on a chart.
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He said the U.S. has not reached the "hockey stick" surge yet, "but when it starts, markets around the world – by the way, because foreigners own $7 trillion of U.S. government debt – there will be a rebellion, and that is the worst possible way to do it."
