Ray Dalio warns that the US government is heading for a 'debt death spiral' as interest payments rise - The Daily Hodl Native investor Ray Dalio says, that the U.S. government is heading into a debt death spiral because of chronic huge deficits

In a new #interview with CNBC, #Ray Dalio, founder of Bridgewater Associates, said that in a healthy credit cycle, all parties, including debtors, creditors and markets, can benefit from the flow of new money into the system.
However, Dalio He said the U. S. government has issued a large amount of debt that could exceed buyer demand.
the billionaire compared it to a person's circulatory system. The credit system is like the circulatory system in the body. And if it is used correctly and generates income, everyone thrives. Lenders get the money, and those who borrow it use it to increase their productivity. It's a wonderful thing. In times like these, debt doesn't grow relative to income.
However, when debt grows relative to income chronically and over time, it is as if there is hoarding in the system. The more debt grows, the less money can be spent out of income. Since the U. S. government currently spends about $1 trillion a year on interest payments, it's a kind of hoarding that strains the system.
Like any other market, the credit market has a supply and demand problem. That is, when you have a large deficit - the deficit is currently projected at 7.5 percent of GDP - you have to sell debt to create it, and the amount of debt being sold and the amount of buyers have to collide. The debt death spiral is part of an accelerating cycle in which debtors have to borrow to pay off their debts. We are now approaching it.
To avoid the death spiral, Dario believes the U. S. must reduce its budget deficit from 7.5% of GDP to 3%.
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