Only a \u201cmiracle\u201d can reverse the problem, the renowned economist believes<\/p>\n\n\n\n
The burgeoning US debt pile is akin to a \u201cdeath spiral\u201d<\/em> that only a \u201cmiracle\u201d<\/em> could extract the country from, economist and ‘Black Swan’ author Nassim Taleb said at a business event on Monday, as quoted by Bloomberg.<\/p>\n\n\n\n Taleb defined the expanding US debt load as a \u201cwhite swan,\u201d<\/em> meaning a risk event that is highly predictable and more probable than a \u201cblack swan\u201d<\/em> event, a metaphor describing an occurrence that comes as a complete surprise.<\/p>\n\n\n\n \u201cSo long as you have Congress keep extending the debt limit and doing deals because they\u2019re afraid of the consequences of doing the right thing, that\u2019s the political structure of the political system, eventually you\u2019re going to have a debt spiral,\u201d<\/em> Taleb said. \u201cAnd a debt spiral is like a death spiral.\u201d<\/em><\/p>\n\n\n\n Earlier this week, US Treasury Secretary Janet Yellen said that the absolute level of US public debt looks like \u201ca scary number.\u201d<\/em><\/p>\n\n\n\n US government federal debt topped $34 trillion for the first time in history at the end of December. It now amounts to about $102,000 for an average American family of three. In 2023 alone, it grew by more than $4 trillion.<\/p>\n\n\n\n According to Taleb, a former trader who is best known for publishing several bestselling books on economics, white swans include both the US deficit and the American economy that has grown more vulnerable to shocks than in previous years. He called such vulnerability a feature of globalization, as problems in one region can ricochet around the world.<\/p>\n\n\n\n When asked how the US\u00a0\u201cdebt spiral\u201d<\/em>\u00a0could play out, Taleb said,\u00a0\u201cwe need something to come in from the outside, or maybe some kind of miracle,\u201d<\/em>\u00a0adding that this makes him\u00a0\u201ckind of gloomy about the entire political system in the Western world.\u201d<\/em><\/p>\n\n\n\n