Can the U.S. Avoid an Oncoming Debt Crisis?

WSJ Opinion: Free Expression

Gerard Baker, Editor at Large, The Wall Street Journal

Society & Culture, News

4.6 • 591 Ratings

🗓️ 5 June 2025

⏱️ 36 minutes

🔗️ Recording | iTunes | RSS

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Summary

The House of Representatives has passed Donald Trump’s “Big Beautiful Bill” and now the Senate is pondering its version. Chief among the concerns for some senators is how much it will add to the federal debt. Already at $36 trillion, how much is too much? Are we on the brink of a major fiscal crisis? On this episode of Free Expression, Bridgewater founder and investor Ray Dalio talks to Gerry Baker about the risks of a debt calamity if bond markets take fright. They also talk about his new book, “How Countries Go Broke: The Big Cycle”, which chronicles the history of governments with unsustainable debt and offers his “3%”, three-part solution for ensuring fiscal health. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	from the opinion pages of the Wall Street Journal.
0:04.6	This is Free Expression with Jerry Baker.
0:08.8	Hello and welcome to free expression from the opinion pages of the Wall Street Journal.
0:12.3	I'm Jerry Baker, editor at large of the journal.
0:14.1	Thanks for joining us.
0:15.0	It's a reminder again, if you're not already subscribing, to subscribe at Apple, podcast, Spotify,
0:19.7	or wherever you do your podcast listening, and do always
0:21.9	leave us a nice review if you feel so inclined. This week, well, the big, beautiful bill is
0:28.5	working its way through the ringer of the United States Congress. I think it's fair to say
0:33.6	that outlook is uncertain. House, of course, passed the bill almost a couple of weeks ago,
0:39.5	and now it is under consideration by the Senate. Of course, the Senate has its own plans, too.
0:43.8	A number of senators are made very clear that they're unhappy with various aspects of the bill.
0:47.3	Most of the attention, I think, it's fair to say, is focusing on the extent to which the bill,
0:51.9	President Trump's plans and Republican plans, add to the already
0:55.1	enormous US fiscal deficit, which is about 6, 7 percent of GDP, and of course in the process,
1:00.5	adding to the massive pile over time of US government debt, which currently stands at
1:06.1	$36, nearly $37 trillion, and that is going to rise sharply. The report from the Congressional Budget
1:12.3	Office this week said that the bill would add an additional $2.5 trillion to the debt over the
1:18.5	next 10 years. That's obviously in addition to the increase in the debt that's already implicit
1:22.5	in the spending and taxation plan. So we are talking about going from a $36 trillion debt to in the region of
1:29.5	maybe $60 trillion debt over the next 10 years. A big question, of course, is this sustainable?
1:33.9	Is this manageable? Will the administrations and the Republicans in Congress tax plans stimulate
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