CNBC: Investor Marc Lasry Thinks the Big-spending U.S. Could Be Headed for Distress

Article by Jeff Cox in CNBC financial

Marc Lasry, who makes his living by investing in distressed companies, thinks the U.S. is potentially heading for that status itself.

Though he’s not sure of the timing and doesn’t expect major problems to happen anytime soon, the billionaire head of the Avenue Capital hedge fund and owner of the Milwaukee Bucks sees high levels of government debt eventually coming back to cause problems.

“How much longer can you keep borrowing dollars at zero?” Lasry said Tuesday at the SkyBridge SALT conference in New York. “If that starts moving up, we’re going to have real issues.”

Lasry referenced the government’s ability to borrow on the cheap to fund a budget deficit that likely will exceed $3 trillion for the second year in a row. The national debt is now at $28.4 trillion and has come with $524.7 billion in interest costs for the first 10 months of fiscal 2021, even with rates on Treasury debt near record lows.

Asked if he thinks the U.S. is merely “kicking the can down the road” before the debt becomes an issue, Lasry said “I think you are,” but he isn’t sure when the day of reckoning will come.

“You can’t just keep borrowing as much as we’re borrowing,” he said. “There is a real cost to that.”

Congressional Democrats are looking to pass another $3.5 trillion in spending aimed at infrastructure improvements and climate change mitigation, on top of the more than $5 trillion that already has been spent in the past year and a half on pandemic-focused stimulus efforts.

“It is big dollars being spent, and ......

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