Bogle Says US Borrowing May Harm Economy

In an interview with CNBC, Jack Bogle, Founder of Vanguard, cautioned that the US rate of borrowing may create a debt crisis. He said that the economy is on the right track, but cautioned that the country needs to rein in its borrowing. Although the economy has recorded good recovery so far, he added that it is showing signs of slipping up again. Upon being asked if the US may have a European type debt crisis, he said that the chances of that happening are very high. He also suggested, “I happen to think that a big savings would come from a transfer tax on securities. One of the reasons we have all this speculation in the market is basically that the frictional costs have been taken out of trading.”