Also, debt has a nasty habit of not being a problem until it is. Debt held by foreign and international investor as a percentage of GDP has been accelerating at an alarming rate since 2007. Buffett may say debt is no big deal, but the battle for tiny uninhabited islands in the South China Sea by China and Japan, two economic powers that own over 50% of the US National Debt that supports our geopolitical (military) reach, disagrees with that assessment.
Chart: Federal Debt Held by Foreign & International Investors As a % of GDP (FDHBFINGDPR) and the London P.M. Fixed Price of Gold (GOLD)
Headline: Buffett: U.S. debt on its own ‘not a problem’
NEW YORK (MarketWatch) — Billionaire Warren Buffett believes the federal deficit should be stabilized in relation to U.S. economic growth, but that the nation’s $16.4 trillion in red ink is not trouble in and of itself.
“It is not a good thing to have it going up in relation to GDP, that should be stabilized, but the debt itself is not a problem,” the CEO of Berkshire Hathaway BRK.A +0.02% said in an interview broadcast Sunday on the CBS “Sunday Morning” news show.
The nation’s debt is “a lower percent of GDP [gross domestic product] than it was when we came out of World War II. You’ve got to think about it in relation to GDP,” added Buffett, a vocal advocate for increased taxes on the nation’s wealthiest, a stance he alluded to in the broadcast.
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