Mounting U.S. debt problems could lead to ‘shocking developments’

[reader]

NOTE — Trump voters with buyers’ regret grows by the minute.

From CNBC

Bridgewater founder Ray Dalio on Wednesday warned that a significant supply-demand problem regarding U.S. debt could have a profoundly disruptive impact on the global economy.

It is the latest in a series of stark warnings about America’s mounting debt from the U.S. hedge fund billionaire, with the country’s national debt currently standing at more than $36.2 trillion.

 

“The first thing is the debt issue, we have a very severe supply-demand problem,” Dalio told CNBC’s Sara Eisen at CONVERGE LIVE in Singapore. ”[The U.S. has] to sell a quantity of debt that the world is not going to want to buy.”

He said this was imminent and of “paramount importance.”

The U.S. deficit needs to go from a projected level of 7.2% of gross domestic product to about 3% of GDP, Dalio said.

“That’s a big deal. You are going to see shocking developments in terms of how that’s going to be dealt with,” he added.

Asked whether the U.S. debt problem could lead to a period of austerity, Dalio said the issue could result in a restructuring of the debt, the U.S. applying pressure on other countries to buy the debt, or even cutting off payments to some creditor countries.

“Just as we are seeing political and geopolitical shifts that seem unimaginable to most people, if you just look at history, you will see these things repeating over and over again,” Dalio said. “We will be surprised by some of the developments that will seem equally shocking as those developments that we have seen.”

https://www.cnbc.com/2025/03/12/ray-dalio-warns-growing-us-debt-will-lead-to-shocking-developments.html

[stevenkesslar]

On 3/12/2025 at 5:00 AM, reader said:

NOTE — Trump voters with buyers’ regret grows by the minute.

From CNBC

 

Bridgewater founder Ray Dalio on Wednesday warned that a significant supply-demand problem regarding U.S. debt could have a profoundly disruptive impact on the global economy.

It is the latest in a series of stark warnings about America’s mounting debt from the U.S. hedge fund billionaire, with the country’s national debt currently standing at more than $36.2 trillion.

 

“The first thing is the debt issue, we have a very severe supply-demand problem,” Dalio told CNBC’s Sara Eisen at CONVERGE LIVE in Singapore. ”[The U.S. has] to sell a quantity of debt that the world is not going to want to buy.”

He said this was imminent and of “paramount importance.”

The U.S. deficit needs to go from a projected level of 7.2% of gross domestic product to about 3% of GDP, Dalio said.

“That’s a big deal. You are going to see shocking developments in terms of how that’s going to be dealt with,” he added.

Asked whether the U.S. debt problem could lead to a period of austerity, Dalio said the issue could result in a restructuring of the debt, the U.S. applying pressure on other countries to buy the debt, or even cutting off payments to some creditor countries.

“Just as we are seeing political and geopolitical shifts that seem unimaginable to most people, if you just look at history, you will see these things repeating over and over again,” Dalio said. “We will be surprised by some of the developments that will seem equally shocking as those developments that we have seen.”

https://www.cnbc.com/2025/03/12/ray-dalio-warns-growing-us-debt-will-lead-to-shocking-developments.html

 

Oh, and by the way, this would cause a tiny little inflation problem too.

I sort of view this as above my pay grade.   But some of the people talking about the implications of a debt crisis talk about things like 25 % inflation.   It sound scary and unimaginable.   But Dalio's point is at some point the printing press can't just keep printing more money.

The Committee for a Responsible Federal Budget estimated last year when he was running that Trump's projected budget deficit would be something like 9 % of GDP, maybe even 10 % if I recall right.  It was a projection last year, and it is all being haggled over right now.   But I think we know for sure we will go in exactly the opposite, and wrong, direction, of where Dalio correctly says we need to go.   Trump will give a fortune to billionaires, which will help make Trump the king of bankrupting the US.