Chamath Sounds Alarm on U.S. Debt Amid New Economic Bill

Billionaire investor Chamath Palihapitiya is raising urgent concerns about the U.S. economy following the recent passage of a controversial bill dubbed The One, Big, Beautiful Bill. Passed by the House on May 22, 2025, the sweeping legislation aims to stimulate growth by cementing the 2017 Trump-era tax cuts and introducing various pro-growth policies. Yet, Palihapitiya warns this approach risks fueling a dangerous debt spiral.

Speaking on the All-In Podcast, he criticized the bill as a hasty political move sacrificing long-term fiscal discipline for short-term gains. He labeled it a form of “debt-financed industrial policy” that could trigger serious economic consequences. The rising yields on U.S. Treasury bonds, he says, already reflect growing investor unease, with the 10-year yield nearing 4.5% and expected to surpass 5% before year-end. The 30-year yield, meanwhile, may exceed 6.25%, levels many economists deem unsustainable.

Palihapitiya cautioned that continued yield increases would likely prompt a sell-off of U.S. debt by global investors, a shift toward assets like gold and Bitcoin, and potentially trigger credit rating downgrades. Such a cascade could undermine confidence in America’s financial stability, intensifying pressures on the dollar and deepening the national debt crisis.

Echoing these concerns, Elon Musk recently emphasized that only explosive GDP growth can prevent national bankruptcy. Musk pointed to government efficiency measures as a stopgap but stressed the urgent need for dramatic productivity improvements to counterbalance rampant spending.

With Treasury yields rising and prominent voices warning of escalating risks, the United States faces a pivotal moment. Chamath Palihapitiya’s alarm signals the fragile state of America’s fiscal health, and the choices lawmakers make now may shape the nation’s economic future for decades.