FX168 Financial News (Asia Pacific) reports that Bank of America (BofA) CEO Brian Moynihan warned that the US national debt has surpassed $35.7 trillion, meaning that the debt burden per US citizen exceeds $0.105 million. He called on the US government to face this hidden danger, emphasizing market concerns that the US government may eventually be unable to repay, warning that this would lead to the US losing its position as the global economic hegemon.

According to Fortune magazine, Brian, along with JPMorgan CEO Jamie Dimon, and Federal Reserve Chairman Powell, are urging politicians to prioritize a plan to bring the ratio of US debt to Gross Domestic Product (GDP) back to a reasonable range.

(Source: Forbes)

Unfortunately, for Moynihan, the potential new occupants of the White House have not heeded their warnings.

Whether it's former US President and Republican presidential candidate Donald Trump, or Vice President and Democratic presidential candidate Kamala Harris's policies, both will increase the US public debt by trillions of dollars.

Brian is worried that if the US cannot find a balance between spending and economic growth, the US may lose its status as the global economic "gold standard".

In an interview with Fox News, he said, "Looking back over the past 10 to 12 years, people have always been concerned about the heavy debt burden."

"Then we encountered the new coronavirus epidemic, the US government needed to invest a large amount of money to win the victory against the virus, and prevent the economy from truly declining and falling into a deep recession," he continued.

"The US government - whether it's the previous administration or the current one - has done very well. Now all of that is in the past. Now we have to ask, just like with every war you've fought, how do you pay the bills after the war?"

According to data from the Committee for a Responsible Federal Budget (CRFB), the net increase in debt during President Trump's term was $8.4 trillion, of which $4.8 trillion was unrelated to the new coronavirus epidemic, $3.6 trillion was for the CARES Act and coronavirus relief funds.

President Biden has increased the national debt by $4.3 trillion, with $2.2 trillion coming from non-Covid borrowing and $2.1 trillion for the American Rescue Plan.

Forbes wrote: "In fact, economists are not worried about the U.S. government borrowing per se; in fact, it is crucial to maintaining the country's bond market. They are more concerned about the ratio of U.S. debt to GDP. If this ratio is imbalanced, it means the U.S. economy cannot generate enough growth to meet its current debt and future fiscal needs."

According to a report released by the Congressional Budget Office (CBO) in March, public debt is projected to reach 166% of GDP by 2054, which is $141.1 trillion.

In response, Moynihan stated that to restore the balance between debt and GDP, policymakers have two choices: reduce spending or increase GDP.

He explained: "One can achieve this goal in various ways, you can solve it through growth, strict spending discipline, raising taxes, or attracting more investment through tax cuts. But I tell you, the world envies this economy, and if we cannot manage the debt well, it may no longer be so enviable in the future."

However, he also mentioned that the debt issue is not something the new government can address in the first week, but requires long-term discipline to deal with.

However, some experts believe that the US national debt is not a problem because recent spending is aimed at boosting productivity. Columbia University professor Brett House said: "If public debt is used for measures to enhance productivity, ensuring that economic growth can support the debt, then the debt is reasonable."

Brett continued: "Although for most countries, a debt-to-GDP ratio exceeding 100% is a problem, the USA is not like most countries. All US debt is denominated in US dollars, and when the world is in a political or financial crisis, funds tend to flow into the US Treasury market as a safe value store. Therefore, the USA can always find new debt buyers."

However, many experts disagree with House's point of view, as they believe that ultimately the market will question whether the USA has the ability to repay its debt.