Large Bank Supervision Forum eBook

Internal Use Only

How to Reduce Debt/GDP: • Fiscal Austerity Measures • Cut Government Spending • Increase Tax Revenues • Faster Economic Growth (faster than debt growth) • Negative Real Return on Bonds (interest rates < inflation rates) ~40% ~40% ~20%

1945 - 1975

Internal Use Only

The Federal Debt Debacle

• Federal Debt is Growing Rapidly • Interest Payments Are Rising with Higher Rates • Publicly-Held Debt-to-GDP Near Historical Highs • Conclusion: The U.S. Federal Debt Path is Unsustainable