Barron's: U.S. Debt Could Drive the Next Financial Crisis
Article by Sheila Bair (Former chair of the FDIC) in Barron's
I have seen more than my fair share of financial crises during my time in the U.S. government. I was the assistant secretary of the U.S. Treasury for financial institutions during the 9/11 terrorist attacks and chair of the Federal Deposit Insurance Corp. during the 2007-2008 financial crisis. The U.S. government resorted to deficit-financed spending and tax relief to these crises, and to the pandemic. Those decisions were right.
Unfortunately, once the crises passed, we just kept spending as if nothing had changed. Now, the resulting overhang of federal debt could itself be the cause of a future crisis.
Our gross national debt exceeds $35 trillion. This puts the federal debt held by the public at a staggering 99% of U.S. gross domestic product, nearly as high as ......