Fred Smith, the founder of executive chairman of shipping giant FedEx, is the latest business leader to sound the alarm that if America’s ballooning public debt is left unchecked, it will threaten to spiral into a catastrophic crisis.
Mr. Smith was asked during an interview on Fox News for his opinion on projections from the Congressional Budget Office (CBO) that U.S. federal debt held by the public will go from 99 percent of gross domestic product (GDP) in 2024 to a record 116 percent in 2034, before pushing above 170 percent by midcentury.
He replied by saying that warnings about the level of government spending adding to America’s public debt are both serious and growing and, “hopefully, I’m adding to the chorus and saying this is unsustainable.”
‘Catastrophic Fiscal Crisis’
Mr. Smith told Fox News that America’s ability to print money depends on the dollar remaining the world’s foremost reserve currency, but that this is increasingly at risk.“The so-called BRICs alliance—Brazil, Russia, India and China—have set out on a deliberate course to dethrone the dollar,” Mr. Smith said. “If that happens and we can’t sell our bonds, I can assure you the living standards that we all enjoy today are going to be a thing of the past.”
The Fox News host then recalled Mr. Smith’s remarks at an event in December, when the FedEx chairman said that he hoped political leaders in Washington could recognize the “unprecedented dangers” that the country faces in terms of political and financial instability, and would have enough common sense to take steps to avoid a “catastrophic fiscal crisis.”
Asked whether he sees the wisdom to avert a catastrophe in today’s political leaders, Mr. Smith said: “no, quite the contrary.”
Ms. Yellen’s remarks came during a Feb. 6 appearance before the House Financial Services Committee, when asked if the U.S. budget would ever be balanced over the next 50 years to bolster the country’s financial standing.
