The United States could face a similar dismal fate like Europe if the debt load continues to rise, said Vanguard founder John Bogle.
While America’s economy is improving, there are already signs of weakness, he told TheStreet.com.
“We have a very good recovery so far, but I see signs of slippage," he said. "I'm not sure that I believe we will have a double dip, another drop, but I don't see this recovery getting any stronger than it is now,” Bogle said.
If the United Stated fails to rein in its debt, it could easily become another Spain or Greece, he said.
“It will absolutely happen here, unless we have the courage and perspective and wisdom to start to fix the mess we're in. In other words, we don't have a hopeless situation. We have a situation that is only hopeless if we refuse to deal with it,” Bogle said.
Postponing Social Security could be a solution to additional revenue, he said.
“If you were to have, let's say half a percent more revenues and half of percent less expenses, you would basically solve the problem within a few years,” Bogle said.
Investors are turning to U.S. Treasuries as a safe haven, pushing prices higher, Reuters reported.
“We need employment to improve before we see a sustained recovery in housing,” said Gary Thayer, chief macrostrategist at Wells Fargo Advisors.
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