Jamie Dimon, CEO of JPMorgan, has stated that he favours abolishing the debt limit, giving the government the faculties to extend its debt without congressional action. Dimon believes that this could prevent the drama surrounding the build-up to extending or not extending the debt limit and also warned of the effects of such a situation, as the U.S. economy is foundational for the world.
In an interview given to Punchbowl, a U.S. politics-focused outlet, Dimon declared that he hopes one day the debt limit can be abolished. He also stated that even getting close to defaulting is dangerous for the American and the world economy, as it puts doubts on the capabilities of the U.S. government to honor its debts.
Dimon, who has been at the helm of JPMorgan since 2005, is also aware of the political aspect of the discussion, having also lived through the 2008 economic crisis. He believes that this can lead to taking wrong decisions as Congress tries to reach an agreement on the subject.
Finally, he concluded by stating that this situation could cause panic and that this panic can lead to irrationality, creating unwanted turmoil in U.S. and world markets.
On May 1, Treasury Secretary Janet Yellen warned that the U.S. government could default as early as June 1 without Congress’s intervention.
What do you think about JPMorgan CEO Jamie Dimon’s take on the debt limit issue and its effects? Tell us in the comment section below.