Goldman Sachs warns: US debt is approaching World War II peak levels, and delaying the resolution of the deficit will lead to severe fiscal tightening.

On June 20, Goldman Sachs noted that Trump's spending plan could not prevent US Treasuries from climbing to "unsustainable" highs, with US debt levels now second only to those during World War II. Next year, the United States will have to pay $1 trillion in interest on $36 trillion in national debt, more than health insurance and defense spending combined. Goldman Sachs economists warn that if U.S. lawmakers delay addressing the deficit, they may need to avert a crisis through fiscal austerity, which is rare in history. "Large-scale fiscal consolidation could lead to a decline in GDP, but it would not reduce the debt-to-GDP ratio. Even more dangerous is the possibility of printing a lot of money to pay off debts – the experience of the Weimar Republic in Germany in the '20s suggests that this would lead to hyperinflation and social unrest." The nonpartisan Congressional Budget Office estimates that the Republican spending bill will add $2.8 trillion to the deficit over the next decade. The White House argues with some Republican lawmakers that the forecast should not include the cost of extending Trump's 2017 tax cuts, which would expire this year if not extended. (Golden Ten)