Squawk on the Street CNBC Special Report: America's Deficit Reckoning 7/7/25
Jul 7, 2025
Michael Mullen, former Chairman of the Joint Chiefs of Staff, shares his insights on America's fiscal crisis. He discusses the urgent need to address the rising national debt and its consequences, including threats to economic stability and national security. Mullen emphasizes how unchecked borrowing risks market confidence and geopolitical vulnerability, particularly in relations with China. His call for constructive dialogue highlights the internal divides threatening unity as the nation faces significant budgetary challenges.
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U.S. Debt Reaches Historic Levels
- The U.S. debt ratio is set to exceed its historical peak from post-WWII in just four years.
- America spends far more than it earns, borrowing to cover deficits, which poses risks if uncontrolled.
Rubin's Deficit Negotiation Story
- Robert Rubin recalls debates during Clinton's incoming economic team about making deficit reduction a political priority.
- Their 1993 Deficit Reduction Program balanced cuts with public investment, leading to a balanced budget by 1998.
Limited Time to Fix Deficit
- The U.S. has a maximum of 20 years to fix its deficit before economic collapse risks rise sharply.
- Absent congressional action, a default or extreme money printing to pay debts becomes inevitable.
