Goldman Sachs CEO says AI-induced growth offers a ‘path out’ of America’s $38 trillion debt crisis

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Their concern is for the day when confidence in the bond market wanes, when buyers of America’s borrowing question whether Uncle Sam can really pay his debts.Goldman Sachs CEO David Solomon is among those concerned about the $38 trillion national debt problem, joining the ranks of JPMorgan CEO Jamie Dimon, Fed chair Jerome Powell, Bridgewater Associates founder Ray Dalio, and increasingly, politicians on Capitol Hill.Indeed, like his counterparts, Solomon isn’t necessarily worried about the value of the debt America has accumulated, but rather its debt-to-GDP ratio. This barometer indicates to the market how much the U.S. is adding to its debt obligations in relation to how quickly its economy is growing—and thus its ability to pay back the loans. At present, that balance sits at around 125% according to Treasury data, but is expected to hit 156% by 2055, according to the Congressional Budget Office (CBO).The balance of debt to GDP presents two options to reduce the benchmark: either cutting spending or growing the economy. The latter is seen as preferable by many, but potentially an optimistic choice that doesn’t address the problem of fiscal overstretch.Solomon said, in the current environment, with the promise of AI boosting Wall Street to new highs, the growth option is looking more and more realistic. Speaking at the Economic Club of Washington, D.C. last week, the banking titan noted: “The path out is a growth path. The difference between compounding growth of 3% and 2% is monstrous in terms of dealing with this issue, so there’s a lot of discussion about running … real growth play.“I think we have some things that are going to give us a better opportunity to have a higher growth trajectory, particularly … technology, AI getting embedded into the enterprise, and the productivity opportunity from that,” he added. “But if we continue on the current course, and we don’t take the growth level up, there will be a reckoning.”According to the latest data, there’s reason for Solomon to hope. Per the Bureau of Economic Analysis’s most recent estimates (last shared on Sept. 25 as no new releases are being shared during the government shutdown), GDP in the second quarter was up 3.8%.Solomon, who has led Goldman Sachs since 2018, added that national debt doesn’t have to become a “crisis.” That being said, he did say many of his contacts in the business community are worried about the level of debt and the behavior that now seems to be the norm.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,771.55 -80.42 (-1.17%)Dow 3047,085.24 -251.44 (-0.53%)Nasdaq23,348.64 -486.09 (-2.04%)Russell 20002,427.34 -43.90 (-1.78%)VIX19.00 +1.83 (+10.66%)Gold3,943.70 -16.80 (-0.42%)PortfolioSign in to access your portfolioSign inTop gainersHTZ Hertz Global Holdings, Inc. 6.73 +1.79 (+36.23%)XMTR Xometry, Inc. 62.62 +14.05 (+28.93%)PAY Paymentus Holdings, Inc. 36.10 +7.49 (+26.18%)MTSR Metsera, Inc. 73.18 +12.45 (+20.50%)SANM Sanmina Corporation 163.58 +23.24 (+16.56%)Top losersDGNX Diginex Limited 18.25 -5.38 (-22.77%)NCLH Norwegian Cruise Line Holdings Ltd. 18.79 -3.39 (-15.28%)NVTS Navitas Semiconductor Corporation 10.46 -1.79 (-14.61%)ZTS Zoetis Inc. 124.46 -19.89 (-13.78%)WRD WeRide Inc. 9.41 -1.49 (-13.72%)Most activeNVDA NVIDIA Corporation 198.69 -8.19 (-3.96%)PFE Pfizer Inc. 24.30 -0.36 (-1.46%)HTZ Hertz Global Holdings, Inc. 6.73 +1.79 (+36.23%)PLTR Palantir Technologies Inc. 190.74 -16.44 (-7.94%)GRAB Grab Holdings Limited 5.79 -0.29 (-4.70%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersAMD Advanced Micro Devices, Inc. 250.05 -9.60 (-3.70%)BTC-USD Bitcoin USD 101,192.84 -5,417.56 (-5.08%)SMCI Super Micro Computer, Inc. 47.40 -3.35 (-6.60%)RIVN Rivian Automotive, Inc. 12.50 -0.69 (-5.23%)UPST Upstart Holdings, Inc. 46.24 -1.30 (-2.73%)Top economic events