Larry Fink Flags Risks As US Debt Soars
As the US federal debt has just crossed the staggering threshold of 36 trillion dollars, Larry Fink, CEO of BlackRock, warns: without a significant rebound in growth, the world’s most powerful economy risks hitting a fiscal wall. Behind this warning lies an explosive equation combining chronic deficits, political inertia, and increased dependence on foreign investors.
In Brief
- Federal debt has crossed 36 trillion dollars, quadrupling in 25 years and posing a systemic risk according to Larry Fink, CEO of BlackRock.
- Growth below 3 % would make debt service uncontrollable, especially since new tax reforms could add an additional 2.4 trillion dollars to the debt.
- Reviving private investment, simplifying infrastructure permits, and building an industrial strategy are the three identified levers to turn the situation around.
- Some propose a bold strategy of accumulating Bitcoin to eventually generate budget surpluses, an idea still marginal but indicative of a paradigm shift.
A Debt Trajectory Deemed Unsustainable by Wall Street
In the year 2000, the US public debt stood at 8 trillion dollars. Twenty-five years later, it has more than quadrupled, reaching 36 trillion. To this structural pressure is added a cyclical threat. Congress is currently considering a new tax reform that could inject between 2.3 and 2.4 trillion dollars of additional debt .
Larry Fink, head of the giant BlackRock, warns about the viability of this budget path. He cautions that at the current pace, economic growth below 3 % per year would make debt service uncontrollable.
Blocked Reforms, Stifled Growth, Shaken Foreign Confidence
To avoid a solvency shock, Larry Fink identifies three levers. First, revive private investment, currently hindered by regulatory blockages. Second, accelerate permit procedures for major infrastructure projects. Third, undertake a genuine industrial policy around strategic sectors such as artificial intelligence.
On this last point, human needs are glaring: about 500,000 electricians are missing to support the infrastructures necessary for digital transformation. But these ambitions face slow bureaucracy and a polarized political climate. Moreover, time is pressing : the higher the debt grows, the more interest service reduces budgetary room for maneuver.
Another point of fragility: the creditor structure. Nearly 25 % of US Treasury bonds are held by foreign investors. In a context of trade and geopolitical tensions, this dependence of the United States could become a double-edged sword. A loss of confidence by these creditors would mechanically drive interest rates up, further increasing the debt burden.
Faced with the stalemate of traditional solutions, some voices, such as that of entrepreneur Michael Saylor, propose a bold alternative: using Bitcoin as a strategic asset to strengthen the US budgetary position in the long term.
In this environment where conventional solutions struggle to contain runaway debt, some players, like Michael Saylor, suggest that the United States could capitalize on their financial power to accumulate BTC , then leverage its long-term valuation to generate budget surpluses. While this approach is still prospective, it reflects a shift in mindset: viewing crypto-assets not as systemic threats but as fully-fledged economic levers.
