Business leaders and economists are expressing growing concern over America’s debt problem, with figures such as JPMorgan CEO Jamie Dimon and Bridgewater hedge fund founder Ray Dalio warning of a looming crisis. The national debt has exploded in recent years due to factors like Trump-era tax cuts, Covid-era stimulus programs, and ongoing spending through President Joe Biden’s initiatives. The deficit has reached about $855 billion so far this fiscal year, adding to the $34.6 trillion cumulative debt the US is carrying. The US is running a deficit equivalent to nearly 7% of GDP while the economy is at full potential, implying that a recession could lead to unsustainable deficit levels.
As deficits grow, the federal government must issue more Treasury securities, which raises borrowing costs and hurts economic growth. The International Monetary Fund and the head of the Congressional Budget Office have warned that the high and rising level of US government debt could drive up borrowing costs globally, risking financial stability. The US government currently spends $2.4 billion on interest payments daily, a figure expected to double in the next decade as low-interest-rate Treasuries mature. Despite 82% of voters expressing concern about the debt and deficit, government officials are hesitant to address the issue heading into an election year, potentially causing interest rates to rise significantly in the future.
Trump Media & Technology Group, the owner of Truth Social, reported a loss of over $300 million in the first quarter of 2022, raising questions about the company’s valuation. The company cited non-cash expenses from conversion of notes and eliminated liabilities for the losses, expressing confidence in future revenue growth from new products like streaming. Operating loss for the company was $12.1 million, largely due to one-time payments related to a merger earlier in the year. Revenue for Trump Media was just $770,500, with the company’s cash balance of $274 million as of March offering sufficient funding for the business in the near future.
Martin Gruenberg, head of the Federal Deposit Insurance Corporation, announced his intent to resign following an investigation detailing pervasive sexual harassment, discrimination, and bullying within the agency. The independent report commissioned by the FDIC confirmed the findings of a previous investigation and highlighted instances of Gruenberg’s behavior that hindered trust and confidence among employees. Senator Sherrod Brown has called for new leadership at the agency, leading to Gruenberg’s decision to step down once a successor is confirmed. Gruenberg has been with the FDIC for almost two decades, serving as chair for nearly 10 of the past 13 years.
