Why We Are at an Inflection Point with U.S. Debt
Principles by Ray Dalioยท2025-10-06 15:10
Debt Accumulation & Service - Government spending exceeds intake by 40%, with $7 trillion in spending against $5 trillion intake, indicating a chronic fiscal imbalance [2] - Debt service payments are squeezing buying power, potentially leading to an economic "heart attack" [2][3] - The situation is approaching a point where new debt is needed to service existing debt [3] Market Dynamics & Supply-Demand Imbalance - The government needs to sell $12 trillion in the markets, comprising $9 trillion of existing debt coming due, $1 trillion in interest, and $2 trillion of new borrowing [3][4] - The imbalance between the amount of debt that needs to be sold and the likelihood of it being bought is a problem [4]