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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.

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Science

Crystalline Ice Discovered in Space: New Study Reveals Hidden Order in Cosmic Ice

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Crystalline Ice Discovered in Space: New Study Reveals Hidden Order in Cosmic Ice

Water ice coats many outer solar system bodies – from Jupiter’s icy moon Ganymede (above) to interstellar dust. On Earth, ice freezes into a neat crystal lattice, but in the deep cold of space it was assumed to form a completely amorphous (glassy) solid. A new study by University College London and Cambridge scientists challenges this picture. Their computer simulations and X-ray tests on cosmic “low-density” ice suggest it actually contains tiny crystalline grains. In some models roughly 20–25% of the ice was in crystal form, overturning the long-held view that space ice is entirely structureless.

Simulations reveal hidden nanocrystals

According to the paper, computer simulations of space ice showed it contains nanocrystals. In one approach, researchers cooled virtual water to –120 °C at different rates to form model “ice cubes.” Depending on the cooling speed, the simulated ice ranged from fully amorphous to partly ordered. Structures with roughly 16–19% of the molecules in tiny crystal clusters best matched published X-ray data for low-density ice. In another simulation, thousands of nanometer-sized ice grains were packed together and then the remaining water molecules were randomized. This produced ice about 25% crystalline, yet still reproduced the known diffraction pattern.

In laboratory experiments the team also made actual low-density amorphous ice by vapor deposition and gentle compression. When these samples were slowly warmed to crystallize, the resulting ice showed a “memory” of its formation method.

Implications for planets and origins of life

The findings give “a good idea of what the most common form of ice in the Universe looks like at an atomic level,” which is important for models of planet and galaxy formation. They also bear on theories of life’s origins. Partly crystalline ice has less internal space to trap organic molecules, potentially making it a less efficient vehicle for amino acids or other prebiotic compounds. However, Dr. Davies notes that pockets of fully amorphous ice still exist, so cosmic dust grains and cometary ices could continue to harbor organic ingredients in those disordered regions.

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Business

Chancellor Rachel Reeves considering ‘changes’ to ISAs – and says there’s too much focus on ‘risk’ in investing

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Chancellor Rachel Reeves considering 'changes' to ISAs - and says there's too much focus on 'risk' in investing

The chancellor has confirmed she is considering “changes” to ISAs – and said there has been too much focus on “risk” in members of the public investing.

In her second annual Mansion House speech to the financial sector, Rachel Reeves said she recognised “differing views” over the popular tax-free savings accounts, in which savers can currently put up to £20,000 a year.

She was reportedly considering reducing the threshold to as low as £4,000 a year, in a bid to encourage people to put money into stocks and shares instead and boost the economy.

However the chancellor has shelved any immediate planned changes after fierce backlash from building societies and consumer groups.

In her speech to key industry figures on Tuesday evening, Ms Reeves said: “I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach, we are united in wanting better outcomes for both savers and for the UK economy.”

She added: “For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.”

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Rachel Reeves’s fiscal dilemma

Ms Reeves’s speech, the first major one since the welfare bill climbdown two weeks ago, appeared to encourage regulators to focus less on risks and more on the benefits of investing in things like the stock market and government bonds (loans issued by states to raise funds with an interest rate paid in return).

She welcomed action by the financial regulator to review risk warning rules and the campaign to promote retail investment, which the Financial Conduct Authority (FCA) is launching next year.

“Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves”, Ms Reeves told the event in London.

Read more:
Should you get Lifetime ISA? Two key issues to consider
Building societies protest against proposed ISA reforms
Is there £15bn of wiggle room in Reeves’s fiscal rules?

Last year, Ms Reeves said post-financial crash regulation had “gone too far” and set a course for cutting red tape.

On Tuesday, she said she would announce a package of City changes, including a new competitive framework for a part of the insurance industry and a regulatory regime for asset management.

Please use Chrome browser for a more accessible video player

Reeves is ‘totally’ up for the job

In response to Ms Reeves’s address, shadow chancellor Sir Mel Stride said: “Rachel Reeves should have used her speech this evening to rule out massive tax rises on businesses and working people. The fact that she didn’t should send a shiver down the spine of taxpayers across the country.”

👉Listen to Politics at Sam and Anne’s on your podcast app👈  

The governor of the Bank of England, Andrew Bailey, also spoke at the Mansion House event and said Donald Trump’s taxes on US imports would slow the economy and trade imbalances should be addressed.

“Increasing tariffs creates the risk of fragmenting the world economy, and thereby reducing activity”, he said.

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Politics

Chancellor Rachel Reeves considering ‘changes’ to ISAs – and says there’s too much focus on ‘risk’ in investing

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Chancellor Rachel Reeves considering 'changes' to ISAs - and says there's too much focus on 'risk' in investing

The chancellor has confirmed she is considering “changes” to ISAs – and said there has been too much focus on “risk” in members of the public investing.

In her second annual Mansion House speech to the financial sector, Rachel Reeves said she recognised “differing views” over the popular tax-free savings accounts, in which savers can currently put up to £20,000 a year.

She was reportedly considering reducing the threshold to as low as £4,000 a year, in a bid to encourage people to put money into stocks and shares instead and boost the economy.

However the chancellor has shelved any immediate planned changes after fierce backlash from building societies and consumer groups.

In her speech to key industry figures on Tuesday evening, Ms Reeves said: “I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach, we are united in wanting better outcomes for both savers and for the UK economy.”

She added: “For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.”

Please use Chrome browser for a more accessible video player

Rachel Reeves’s fiscal dilemma

Ms Reeves’s speech, the first major one since the welfare bill climbdown two weeks ago, appeared to encourage regulators to focus less on risks and more on the benefits of investing in things like the stock market and government bonds (loans issued by states to raise funds with an interest rate paid in return).

She welcomed action by the financial regulator to review risk warning rules and the campaign to promote retail investment, which the Financial Conduct Authority (FCA) is launching next year.

“Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves”, Ms Reeves told the event in London.

Read more:
Should you get Lifetime ISA? Two key issues to consider
Building societies protest against proposed ISA reforms
Is there £15bn of wiggle room in Reeves’s fiscal rules?

Last year, Ms Reeves said post-financial crash regulation had “gone too far” and set a course for cutting red tape.

On Tuesday, she said she would announce a package of City changes, including a new competitive framework for a part of the insurance industry and a regulatory regime for asset management.

Please use Chrome browser for a more accessible video player

Reeves is ‘totally’ up for the job

In response to Ms Reeves’s address, shadow chancellor Sir Mel Stride said: “Rachel Reeves should have used her speech this evening to rule out massive tax rises on businesses and working people. The fact that she didn’t should send a shiver down the spine of taxpayers across the country.”

👉Listen to Politics at Sam and Anne’s on your podcast app👈  

The governor of the Bank of England, Andrew Bailey, also spoke at the Mansion House event and said Donald Trump’s taxes on US imports would slow the economy and trade imbalances should be addressed.

“Increasing tariffs creates the risk of fragmenting the world economy, and thereby reducing activity”, he said.

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