(Bloomberg) — BlackRock Inc. Chief Executive Officer Larry Fink said the US public debt situation “is more urgent than I can ever remember” and that the country needs to adopt policies to spur economic growth.
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The nation can’t rely on taxes and spending cuts to get the problem under control, Fink wrote in his annual letter Tuesday. He raised the prospect of a “bad scenario” akin to Japan’s economy in the late 1990s and early 2000s, which led to a period of austerity and stagnation.
“A high-debt America would also be one where it’s much harder to fight inflation since monetary policymakers could not raise rates without dramatically adding to an already unsustainable debt-servicing bill,” said Fink, 71.
The cost of servicing the debt has already ballooned, and the 3 percentage points in extra interest payments the US government now must pay on 10-year Treasuries compared with three years ago is…
