The alarm bells are ringing – and they’re getting louder. Billionaire investor Chamath Palihapitiya is sounding off about what he sees as a ticking time bomb for the U.S. economy: a soaring national debt, rising Treasury yields, and the threat of a credit downgrade, all triggered by a controversial new bill that just cleared Congress.
On May 22, 2025, the House passed The One, Big, Beautiful Bill, a sweeping measure aiming to reignite economic growth by locking in the 2017 Trump-era tax cuts and launching a series of pro-growth initiatives. But Palihapitiya sees trouble brewing beneath the surface.
Debt-Fueled Growth or Financial Disaster?
Speaking on the All-In Podcast, Palihapitiya didn’t mince words. He criticized the bill as a rushed, last-minute move that trades long-term stability for short-term political wins. Rather than focusing on fiscal discipline, he says, lawmakers opted for what he calls “debt-financed industrial policy.”
“That lack of discipline is going to create a negative set of consequences,” he warned.
According to Palihapitiya, the numbers don’t lie. The 10-year Treasury yield is already hovering around 4.5%, and it’s climbing fast. If the trend continues, we could see it surpass 5% by year’s end. Meanwhile, the 30-year yield is on track to break 6.25%, maybe even hit 6.5% – well beyond what most experts consider sustainable for the U.S. economy.
The Fallout: Investors Pull Back, Credit Downgrade Risk Grows
So what happens if yields keep rising? Palihapitiya says the implications are serious.
“You’ll de-lever from the United States, you’ll sell U.S. debt, you’ll own things like gold and Bitcoin,” he explained. “You’ll have ratings organizations that add to this cascade by downgrading the United States.”
This is more than just a hypothetical scenario. A wave of deleveraging could trigger a loss of global confidence in U.S. financial stability, especially if top credit rating agencies start issuing downgrades. Investors may flee toward safer, alternative assets – further pressuring the dollar and deepening the debt spiral.
Elon Musk Weighs In: Only Explosive Growth Can Save Us
Echoing this, Elon Musk recently warned that only exponential GDP growth can avert national bankruptcy, with the Department of Government Efficiency (DOGE) offering only temporary relief. Musk stressed that rampant government spending demands radical productivity gains to save the economy.
Time for Action: Can America Avoid Financial Ruin?
With Treasury yields surging, investor sentiment shifting, and warnings from some of the sharpest minds in tech and finance, the U.S. finds itself at a critical juncture.
Palihapitiya’s warning is a flashing red signal that the balance sheet of the world’s largest economy may be tipping into dangerous territory. Whether lawmakers choose to reverse course or continue down the current path may define the country’s economic future for decades to come.
One thing is clear: the clock is ticking.
