- Prior year -$129.0B
- Federal budget deficit for Feb 2025 -$307.9B vs -$303.15B estimate
- YTD deficit $-1.147T vs comarable 2024 deficit of -$828B. That is big
- Outlays $603B vs $567B in Feb. This is a record
- Receipts $296B vs $271B in Feb
Problem areas:
- Debt interest spending is up 10%
- Social Secuirty up 6%
- Medicare/Medicade up 5%
- Defense spending up 8%
Not good.
Ray Dalio, founder of Bridgewater Associates, spoke at a CNBC event in Singapore, and warned of a severe supply-demand issue with U.S. debt, which could have disruptive global economic consequences. He highlighted that the U.S. must sell more debt than the world is willing to buy, calling the situation imminent and of paramount importance. The U.S. deficit, currently projected at 7.2% of GDP, needs to be reduced to 3%, which he expects will lead to shocking developments, including potential debt restructuring, pressuring foreign buyers, or cutting payments to creditors.
Dalio compared the current economic and geopolitical landscape to 1930s Germany, citing debt write-downs, rising tariffs, and economic nationalism as historical parallels. He warned that tariffs will escalate tensions between countries, not necessarily through military conflict but through economic confrontations involving the U.S., Canada, Mexico, and China. With trade policy uncertainty already unsettling markets, he emphasized that these ongoing disputes will have serious consequences. Dalio maintained a neutral stance, stating his perspective is based on historical patterns rather than ideology.
