Goldman Sachs CEO raises alarm on US debt: 'Ability to spend without constraint is not unlimited'

Published

12 months ago

May 14, 2024

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Goldman Sachs CEO David Solomon said that US policymakers need to put greater “focus” on the nation’s ballooning debt and deficit — warning that the federal government’s “ability to spend without constraint is not unlimited.”

“I think the level of debt in the United States [and] the level of spending is something that we need a sharper focus on and more dialogue around than what we’ve seen,” the 62-year-old investment banking chief told Bloomberg Television on Monday.

Solomon said that while it was anticipated that the government would spend to prop up the economy during COVID lockdowns, “we’re a long way out of that pandemic.”

“The spending levels…are continuing at a pace that I think is raising our debt level and creating issues for us down the road,” the Goldman boss said.

Solomon said the issue is “something that deserves a lot of attention.”

“It’s not getting as much attention as I’d like to see it get right now,” he said, noting that the US is in the midst of an election year. “But I do think it’s something that requires focus.”

Solomon said “we need to deal with the debt and the deficits.”

“Hopefully, there will be a lot more discussion [about the issue] as we move through the election and into the next administration.”

Since coming into office in January 2021, President Joe Biden’s administration has enacted legislation calling for the spending of more than $1 trillion on various items such as infrastructure, COVID relief, domestic semiconductor manufacturing and climate initiatives.

Biden on Monday unveiled a $7.3 trillion election-year budget that calls for raising taxes on corporations and high earners.

But critics have accused the Biden administration of exacerbating the nation’s debt crisis.

The International Monetary Fund, which operates under the auspices of the United Nations, noted last month that the US federal budget deficit grew from $1.4 trillion in fiscal 2022 to $1.7 trillion last year.

The national debt, which recently surpassed $34 trillion, is on course to exceed $45.7 trillion within a decade which is roughly 114% of the gross domestic product, according to projections by the Congressional Budget Office.

Biden officials have blamed his predecessor, Donald Trump, for the surging debt — citing tax cuts that he enacted while in office.

When asked about whether there has been push back from Wall Street against the Biden agenda, Solomon noted that the US dollar continues to hold the status as the world’s most preferred currency.

“The reserve currency is a great privilege,” Solomon said, adding that he didn’t see “a threat to that in any way, shape or form.”

“But it’s not something that you can take for granted,” the Goldman chief said. “And the United States’ ability to spend without constraints is not unlimited.”

Solomon predicted that “ultimately, the market will challenge” the federal government’s free-spending ways.

“I’m not saying that’s something that’s coming soon, but it’s certainly something that we should be very cognizant of and very protective of.”

Goldman had a difficult 2023 during which it saw profits dip by a third compared to the previous year thanks to its ill-fated foray into consumer banking.

The bank also reportedly suffered from a decline in morale due to an exodus of top talent as well as unrest over the lack of women in senior positions.

But there are signs the bank’s fortunes are turning around.

The company’s stock recently reached an all-time high of $455 per share. Since Jan. 1, Goldman’s stock has risen more than 17%.

Solomon on Monday sounded an optimistic tone about 2024, saying: “I think the level of IPO activity will pick up in the second half of the year and into 2025.”

But Solomon also cautioned that “fewer and fewer” companies were going public.

That is concerning, he said. Theres obviously an abundance of capital available in private markets, but I do think its important that we have open, accommodative, strong public markets.

Solomon also sounded upbeat about the economy, saying it was chugging along pretty well.

Nonetheless, Solomon expects inflation to continue to persist at high levels.

The Post has sought comment from Goldman Sachs.

Entertainment

Lady Gaga puts on her biggest-ever show for free on Rio’s Copacabana Beach

Published

2 hours ago

May 4, 2025

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Lady Gaga puts on her biggest-ever show for free on Rio's Copacabana Beach

Lady Gaga has performed in front of an estimated 2.1 million people at a free show on Rio de Janeiro’s Copacabana Beach.

Some 500,000 tourists travelled to watch the concert, which was paid for by the city in an attempt to boost the struggling economy.

Saturday night’s two-hour show, which marked Gaga’s biggest ever, marked the first time she had played in Brazil since 2012, having cancelled an appearance at the Rock in Rio festival in 2017 over health issues.

Gaga, who released her seventh studio album, Mayhem, in March, opened with a dramatic, operatic edition of her 2011 track Bloody Mary, before launching into Abracadabra, one of her most recent hits.

“Brazil! I missed you. I missed you so much,” she exclaimed, before launching into Poker Face, one of her biggest hits.

The American pop star drew in a similar crowd to Madonna’s in May last year, who performed at the same beach, which is transformed into an enormous dance floor for the shows.

Addressing the crowd in English and through a Portuguese translator, Gaga became emotional as she said: “I’m so honoured to be here with you tonight.

“Tonight we’re making history, but no one makes history alone. Without all of you, the incredible people of Brazil, I wouldn’t have this moment. Thank you for making history with me.

“The people of Brazil are the reason I get to shine today. But of all the things I can thank you for, the one I most am grateful for is this: that you waited for me. You waited more than 10 years for me.”

She said it took so long to come back because she was “healing” and “getting stronger”. The pop sensation cancelled many of her shows in 2017 and 2018 due to her fibromyalgia condition, which can cause pain and fatigue.

It is estimated Gaga’s show will have injected around 600 million reais (£79.9m) into the economy, nearly 30% more than Madonna’s show.

The large-scale free shows are set to continue annually until at least 2028, always taking place in May, which is considered the economy’s “low season”, according to the city’s government.

A hefty security plan was in place, including the presence of 3,300 military and 1,500 police officers, along with 400 military firefighters.

‘A dream come true’

The city has been swarmed with Gaga fans since her arrival on Tuesday, with some even keeping vigil outside of the hotel she has been staying at.

Many arrived at the beach at the crack of dawn on Saturday to secure good spots on the beach, despite the show not starting until 9.45pm.

Ana Lara Folador, who attended with her sister, said it was “a dream come true”, and that Gaga had “really shaped a part of my personality, as a person and an artist”.

Ingrid Serrano, a 30-year-old engineer who made a cross-continent trip from Colombia to Brazil to attend the show, turned up in a T-shirt featuring Lady Gaga’s outlandish costumes over the years.

“I’ve been a 100% fan of Lady Gaga my whole life,” she said, adding the 39-year-old megastar represented “total freedom of expression – being who one wants without shame”.

Matheus Silvestroni, 25, an aspiring DJ and a Gaga fan since the age of 12, endured an eight-hour bus ride from Sao Paulo for the show.

He said it was Gaga who had inspired him to embrace his sexuality and pursue his dream of becoming an artist.

“I was bullied because I was a fat, gay kid, so I was an easy target,” he said. “Gaga was very important because she sent a message that everything was okay with me, I wasn’t a freak, because I was ‘Born This Way’.”

Rio is known for holding massive open-air concerts, with Rod Stewart holding a Guinness World Record for the four million-strong crowd he drew to Copacabana Beach in 1994.

Politics

Conservatives call for Labour’s Lucy Powell to resign over grooming gang remarks

Published

2 hours ago

May 4, 2025

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Conservatives call for Labour's Lucy Powell to resign over grooming gang remarks

The Conservatives are calling for Lucy Powell to resign after the Labour MP’s exchange with a commentator about grooming gangs.

The comment was made by Ms Powell, the leader of the House of Commons, after Conservative political commentator Tim Montgomerie started to ask a question on BBC Radio 4’s Any Questions.

“I don’t know if you saw the documentary on Channel 4 about rape gangs,” he started, in relation to the recent programme Groomed: A National Scandal, which centred around five girls who were sexually abused by rape gangs.

Ms Powell, who is MP for Manchester Central, responded: “Oh, we want to blow that little trumpet now, do we? Yeah, OK, let’s get that dog whistle out.”

Sir Keir Starmer and the government have been under sustained pressure from political opponents over the handling of historical sex abuse cases in the UK.

ConservativeHome founder Mr Montgomerie, who will be appearing on Sunday Morning With Trevor Phillips, continued: “There is a real issue where… There were so many people in local government, in the authorities, who, for good reason, were worried about upsetting community tensions, that those girls went undefended.”

The conversation moved on, but politicians criticised Ms Powell’s comment, with some calling for her to resign.

Shadow home secretary Chris Philp said in a statement: “This shocking outburst from a Labour cabinet minister belittles the thousands of girls and women who were raped by grooming gangs over decades.

“We have consistently called for a national enquiry in parliament, which has been blocked by Labour ministers who don’t seem to know or care about the disgusting crimes which have been perpetrated.

“Anyone who has seen the shocking Channel 4 documentary will know that it is clearer than ever that this is not a ‘dog whistle’.

“To dismiss thousands of victims who were raped and the cover up that followed is sickening. She should resign.”

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Shadow justice secretary Robert Jenrick said: “Labour’s Lucy Powell thinks it’s a ‘dog whistle’ to demand arrests and accountability for the rape gangs. What a disgusting betrayal of the victims. They are part of the cover-up.”

Ousted Reform MP Rupert Lowe, now an independent, shared a letter he wrote to Ms Powell demanding she apologise, calling her comments “deeply, deeply offensive”.

On X on Saturday night, Ms Powell said: “In the heat of a discussion on AQ, I would like to clarify that I regard issues of child exploitation and grooming with the utmost seriousness. I’m sorry if this was unclear.

“I was challenging the political point scoring around it, not the issue itself. As a constituency MP I’ve dealt with horrendous cases. This Gvt is acting to get to the truth, and deliver justice.”

Sky News has contacted the office for the Leader of the House of Commons for comment.

The long-running row over grooming cases has continued after Labour promised five local inquiries into grooming gangs in January.

Tech billionaire Elon Musk had accused Sir Keir of being “complicit” in the failure of authorities to protect victims and prosecute abusers while the PM was director of public prosecutions from 2008-2013.

The prime minister has repeatedly defended his record, saying it shows he tackled the issue head-on.

World

Israeli pilots’ protest letter reveals deepening rift over ongoing war in Gaza

Published

2 hours ago

May 4, 2025

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Israeli pilots' protest letter reveals deepening rift over ongoing war in Gaza

The Israeli Air Force is regarded as one of the country’s most elite units.

So, when hundreds of current and former pilots call for an end to the war in Gaza to get the hostages out, Israelis take notice.

This month, 1,200 pilots caused a storm by signing an open letter arguing the war served mainly “political and personal interests and not security ones”.

Israeli Prime Minister Benjamin Netanyahu said the original letter was written by “bad apples”.

But Guy Paron, a former pilot and one of those behind the letter, said the Israeli government had failed to move to phase two of the ceasefire deal with Hamas, brokered under US President Donald Trump.

That deal called for a full withdrawal of Israeli forces from Gaza and the release of all the remaining hostages. Mr Netanyahu continues to argue that the war must continue to put pressure on Hamas.

Mr Paron said the (Israeli) government “gave up or violated a signed agreement with Hamas” and “threw it to the trash”.

“You have to finish the deal, release the hostages, even if it means stopping that war,” he argued.

It’s not the first time Israeli pilots have taken up a cause. Many of them also campaigned against Mr Netanyahu’s 2023 judicial reforms.

“In this country, 1,000 Israeli Air Force pilots carry a lot of weight,” Mr Paron added.

“The Air Force historically has been the major force and game-changer in all of Israel’s wars, including this current one. The strength of the Air Force is the public’s guarantee of security.”

Anti-government campaign spreads

Now, the open letter campaign has spread to other parts of the military.

More than 15,000 people have signed, including paratroopers, armoured corps, navy, special units, cyber and medics. The list goes on.

Dr Ofer Havakuk has served 200 days during this war as a combat doctor, mostly in Gaza, and believes the government is continuing the war to stay in power.

He has also signed an open letter supporting the pilots and accused the prime minister of putting politics first.

He said Mr Netanyahu “wants to keep his coalition working and to keep the coalition together. For him, this is the main purpose of the war”.

A ceasefire could lead to the collapse of the prime minister’s fragile far-right coalition, which is opposed to ending the war.

Threat of dismissal

The Israeli military has threatened to dismiss those who have signed protest letters.

We met a former pilot who is still an active reservist. He didn’t want to be identified and is worried he could lose his job.

“This is a price that I’m willing to pay, although it is very big for me because I’m volunteering and, as a volunteer, I want to stay on duty for as long as I can,” he told us.

The controversy over the war and the hostages is gaining momentum inside Israel’s military.

It is also exposing deep divisions in society at a time when there is no clear sign about how the government plans to end the war in Gaza, or when.

The renewed war in Gaza over the last year and a half followed deadly Hamas attacks on Israel on 7 October 2023, which killed 1,200 people, mostly civilians, and saw around 250 taken hostage.

More than 51,000 people have been killed in Gaza during the Israeli military’s response, many of them civilians, according to the enclave’s Hamas-run Ministry of Health.