Goldman Sachs CEO warns of US debt ‘reckoning’ if growth fails to pick up

The mounting level of US debt risks a “reckoning” for the economy if the pace of growth doesn’t improve, according to the chief executive of Goldman Sachs Group Inc.“If we continue on the current course and we don’t take the growth level up, there will be a reckoning,” David Solomon said at a Thursday interview with David Rubenstein hosted by The Economic Club of Washington. “The path out is a growth path.” The Wall Street chief said he saw a “low” chance of a recession in the near-term.

Solomon was echoing widespread concerns that the US and other western economies are becoming addicted to debt-fueled stimulus. That’s grown particularly since measures during the Covid-19 pandemic helped drive up consumer spending.
“Fiscal stimulus and an aggressive fiscal play is really just embedded in the way these democratic economies are operating,” he said, citing worries from the financial community with regard to the US and other advanced nations. “And it’s accelerated meaningfully in the last five year.” The Goldman leader spoke in Riyadh earlier this week, where he dismissed concerns about a potential “systemic” crisis in US credit after a small number of high-profile bankruptcies. He recently arrived in Washington as his company hosts a gathering of small US businesses in the US capital city.His bank posted record third-quarter revenue earlier in October, bolstered by a rise in fees from mergers and acquisitions. On the same day, it told its 48,300 employees that it would cut more jobs this year as artificial intelligence improves efficiency at the bank.