The alarm ringtones sound – and they become stronger. Billionaire Chamath Palihapitiya Sourne with regard to what he considers a delay bomb for the American economy: a national debt, an increase in treasury yields and the threat of credit demotion, all triggered by a new controversial bill which has just erased the Congress.
On May 22, 2025, the house spent The one, big, beautiful invoiceA radical measure aimed at reviving economic growth by locking tax reductions from the 2017 Trump era and by launching a series of pro-growth initiatives. But Palihapitiya sees difficulty brewing under the surface.
Growth fueled by debt or financial disaster?
Speaking on the All-in podcastPalihapitiya did not chop words. He criticized the bill as a last -minute precipitated decision which negotiates long -term stability of short -term political victories. Rather than focusing on budgetary discipline, he says, legislators have opted for what he calls “industrial policy funded by debt”.
“This lack of discipline will create a negative set of consequences,” he warned.
According to Palihapitiya, the figures do not lie. The yield of the treasure at 10 years already oscillates around 4.5%, and it climbs rapidly. If the trend continues, we could see it exceed 5% by the end of the year. Meanwhile, the 30-year yield is on the right track to break 6.25%, perhaps even reaching 6.5%-far beyond that most experts consider durable for the American economy.
The fallout: investors retreat, the risk of credit demotion increases
So what happens if the yields continue to go up? Palihapitiya says the implications are serious.
“You developed from the United States, you will sell us debt, you will have things like gold and bitcoin,” he said. “You will have rating organizations that add to this waterfall by demoting the United States.”
It’s more than a simple hypothetical scenario. A wave of deterioration could trigger a worldwide loss of confidence in American financial stability, especially if the main credit rating agencies are starting to issue downgrades. Investors can flee to safer and alternative active ingredients – pressure on the dollar and deepen the debt spiral.
Elon Musk weighs: only explosive growth can save us
Echoing that, Elon Musk recently warned This one exponential growth of GDP can avoid national bankruptcy, the Ministry of Government Effectiveness (DOGE) offering only temporary relief. Musk stressed that rampant public spending requires radical productivity gains to save the economy.
Action time: Can America avoid financial ruin?
With the rise of the treasure, the change of feeling of investors and the warnings of some of the most sharp minds of technology and finance, the United States is at a critical moment.
Palihapitiya’s warning is a flashing red signal that the assessment of the largest economy in the world could make a switch in a dangerous territory. Whether legislators choose to overthrow the course or continue the current path can define the country’s economic future for the decades to come.
One thing is clear: the clock turns.