November 14, 2019

Powell: Debt not Sustainable

Fed’s Powell: Debt is growing faster than economy, and that’s not sustainable.

The head of the Federal Reserve of the United States has admitted that the current economic policy is "not sustainable" - but that it is not their job to repair it. Jerome Powell, speaking during the testimony before Congress's Joint Economic Committee on 13 November, noted that US public debt is currently growing faster than nominal GDP.

Powell: Solving the debt spiral "not a matter for the Fed". "Ultimately, this is not a sustainable place in the long run," he said. Powell continued: "How to put it right - it's easy to say - how to do it and when to do it, it's an issue that depends on you and not on us".

US indebtedness has now exceeded $23 trillion - about $70,000 per capita, or more than $1 million for every Bitcoin that will ever exist. On the night of November 14 alone, the Fed distributed funds worth 12.7 million BTC to banks, while its balance sheet is growing toward 4 trillion dollars.

For Powell, however, solving the debt crisis simply means that growth beats debt, and even if you don't, it won't mean chaos. "I would be careless if I didn't point out that the consequences, if we don't do it, are just that... Our children and grandchildren will spend their taxpayers' money on debt servicing and not on the things they really need," he continued.

Latest Articles

Economics of Negative Interest Rates

July 28, 2020

Social Consequences of Negative Interest Rates

June 26, 2020

Is Switzerland following in the footsteps of Japan?

June 18, 2020

Webinar on the Effects of Negative Interest Rate Policies

June 17, 2020

Webinar on the Japanification in Europe

June 9, 2020

Deflation and inflation - all at once

May 15, 2020

Swiss Finance Institute’s Webinar on Negative Interest Rates

May 13, 2020

Ultra-loose Monetary Policy and the Japanization of the World

May 7, 2020

Fed Chairman Powell: "We're going places."

April 30, 2020

COVID-19 and the Systemic Challenges of our Financial Order

March 20, 2020
The latest in financial technology.