Black Swan author Nassim Taleb says at this point, it will take a miracle for the US government to avoid falling into a deadly debt spiral.
Taleb’s warnings come as another $201 billion was added to the US national debt in just one month.
According to new data from the Treasury, the US national debt rose from $33.990 trillion at the start of January to $34.191 trillion at the end of the month.
Speaking at an event for Universa Investments – a hedge fund specialized in preparing for sharp market downturns – Taleb says Congress is avoiding addressing the growing fiscal deficit because it fears the consequences, Bloomberg reports.
“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral… And a debt spiral is like a death spiral.”
The best-selling author says that the US national debt, which is currently $34.216 trillion, is turning into a “white swan.” In other words, a black swan, except easily predictable.
According to Taleb, the US economy is much more vulnerable to certain types of shocks than it has been in recent years, mainly because of globalization and how interconnected the world is.
Says Taleb,
“…We need something to come in from the outside, or maybe some kind of miracle…This makes me kind of gloomy about the entire political system in the Western world.”
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