"On a spectrum of opinion about America's national debt, Ray Dalio comes down on the end of "crisis." The Bridgewater Associates founder has long warned America's fiscal trajectory is on a dangerous path owing to its $37.5 trillion national debt-with additional interest payments of $1.13 trillion for the 2025 fiscal year to date. But Dalio, speaking at the Future China Global Forum in Singapore this week, doesn't think the U.S. is in a position to pull back on its spending."
"Economists aren't concerned about the amount of U.S. national debt per se, more its debt-to-GDP ratio. If a country is borrowing at a rate which outpaces its growth, then investors at some point will begin to question the security of the returns on the debt they are holding. This could either result in investors backing out of purchasing the debt, or demanding higher interest payments to offset the risk."
America's national debt stands at $37.5 trillion with about $1.13 trillion in interest payments for the 2025 fiscal year to date. Debt sustainability concerns center on debt-to-GDP ratios rather than absolute debt levels; borrowing that outpaces growth can prompt investors to demand higher yields or stop buying debt. Central banks can mitigate pressure through quantitative easing, effectively reducing real debt burdens. Governments can rebalance by cutting spending or boosting growth, but political and economic constraints make meaningful spending cuts unlikely. Recent large fiscal measures have widened the gap between spending and revenue, increasing market unease about long-term sustainability.
Read at Fortune
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