I’m reading Dalio’s recent book “How countries go broke,” and I don’t really understand this claim that US government debt service cost is currently at about 100% of federal revenue. It feels plainly wrong, but at the same time I can’t image this book gets these kind of numbers wrong. Every source I check says the interest pay is below $1 trillion in 2025 and the revenue is above $5 trillion.

    So what’s the catch? Can someone explain how is this number right?

    Here’s the quote from page 201:

    “The next chart shows central government debt service as a percentage ot government revenue. As shown, it is now at about 100% and it is projected to rise to about 150% in 15 years. To visualize what that means, imagine that the amount of money you had to pay in debt service each year was 50% greater than what you earned each year. It's unthinkable. So, what would one have to believe to think this would work? One would need to believe that the government will be able to 1) roll over the debt that is coming due, 2) sell the new debt that it needs to borrow to fund the deficit, and 3) have holders of the existing debt not sell it (i.e., that those who are lending to the government decide that they want to continue lending to the government because it's not too risky).”

    (Sorry can’t seem to attach the chart image here)

    Ray Dalio’s US gov’t debt service is 100% of revenue?
    byu/soid inAskEconomics



    Posted by soid

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