Dalio Warns of U.S. Debt Entering a 'Death Spiral': Debt Payments Now 200% of Government Revenue Bridgewater founder Ray Dalio posted that the supply of U.S. Treasuries far exceeds demand, driving up yields and borrowing costs, which in turn further inflates debt. He predicts that unless high interest rates sufficiently damage the economy and markets to rebalance the supply-demand of capital, this spiral will be hard to stop. According to his calculations, U.S. national debt is around $32 trillion, with a projected net issuance of $2.1 trillion by 2026. Total debt payments are estimated to account for about 200% of government revenue. He noted that China and Japan are shifting from buying to selling U.S. Treasuries, making it difficult for overseas buyers to provide support. Meanwhile, AI investments are expected to drive up corporate debt and stock issuance, further exacerbating supply pressures. Dalio has previously advised investors to sell bonds and buy gold and Bitcoin. This month, the yield on the U.S. 10-year Treasury briefly approached 5.4%, a nearly 25-year high. Subsequently, institutions like BlackRock and Morgan Stanley Investment Management turned bullish on U.S. Treasuries, citing the value of high yields for portfolio allocation.