Dimon was referring to the work of President Obama, who oversaw the creation of the bipartisan National Commission on Fiscal Responsibility and Reform, commonly known as the Simpson-Bowles (or Bowles-Simpson) Commission. The ensuing report made several recommendations: cutting discretionary spending, reforming tax law, and reshaping health care spending.
While many of the suggestions from the commission have proved a basis for policy arguments when it comes to government spending, none of the conclusions of the report were ever formally brought into law.
“I think we should work on it, but I don’t know—and again, I don’t think anyone can predict: Does it become a real problem in six months, six years? I don’t know—I do know it will become a problem, and the way it would exhibit itself is volatile markets, rates going up … bond vigilantes, people not wanting to buy United States Treasuries, [the U.S.] will still be the best economy, but they’ll not want to own U.S. Treasuries,” Dimon explained. “So we should deal with it sooner than later maybe, and if it gets done that way, it’ll be kind of crisis management which we’ll get through—it’s just not the right way to do it.”
Over the years, both Republicans and Democrats have failed to meaningfully address the issue.
“Neither Democrats or Republicans have really focused on this for a while. It comes up all the time and you talk and you walk the halls of Congress, I mean, almost everyone knows,” Dimon added. “It’s just we haven’t had the will yet to actually deal with it, and it’s unfortunate because it can end up with a real problem, worse than it would otherwise have been. Good policy is free.”
Dimon is bullish on the strength of the U.S. economy, saying it should aspire to hit 3% growth if not “even better than that.”
“If we grew at 3% and not 2% … the debt to GDP would start going down,” he added. “This is the most innovative nation the world’s ever seen. And so I think we should focus a little bit in that to solve the problem too, not just raise taxes or cut expenditures.”
