Problems building for years
On the surface, things don’t look good. U.S. national debt soared to $34.2 trillion by Feb. 14, according to the real-time U.S. Debt Clock.
That total is more than the combined GDP of the top five global economies after the U.S. — China ($17.9 trillion), Japan ($4.2 trillion), Germany ($4.0 trillion), India ($3.4 trillion) and the United Kingdom ($3.0 trillion) — according to World Bank data.
As of Jan. 31, the U.S. federal budget deficit — the difference between government spending and revenue — was at $1.75 trillion. And the U.S. debt-to-GDP ratio — the ratio between a country's government debt and its GDP — is currently at 123%, according to the World Economics GDP Database.
“It would be good if we could get our financial house in order,” Schwarzman stated — but he doesn’t think the U.S. is headed for a “big financial problem.”
“Usually financial crises come when you don’t expect them and they come quickly,” the 76-year-old private equity boss pointed out.
The current problems in the U.S. have been building for years and they seem to be on a slow and steady path to recovery — unless, of course, another macro event throws things off course.
Discover how a simple decision today could lead to an extra $1.3 million in retirement
Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.
Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.
Read More‘Optimistic for 2024’
Despite seemingly dissing so-called Bidenomics and raising alarm bells over what could happen to the U.S. economy, Schwarzman also claimed to be “optimistic” for 2024.
He told Bloomberg the economy has slowed — “that’s normal with high interest rates” — but he expects rates to come down in the second half of the year.
“We will get the [rate] cuts,” he said, with absolute certainty.
Why is Schwarzman so confident? Because Blackstone — the world’s largest alternative asset manager, with $1 trillion in assets under management — is currently measuring U.S. inflation at around 2%, which happens to be the Fed’s inflation target.
This is far better than the latest Bureau of Labor Statistics inflation data, for January, which came in at 3.1% — with the shelter index remaining an outlier at 6%.
“They’re looking at 6% in rents and residential real estate [inflation] and we’re the largest owner of residential real estate and we think it’s 0-1%,” said Schwarzman.
“Let’s bet on us [Blackstone] on this one because we’re the people actually doing it. And if you correct the index for that difference between what’s really going on [in residential real estate] and [what] they’re saying is 6.2%, you get around 2%.”
This 2 minute move could knock $500/year off your car insurance in 2024
OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.
You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.
