Goldman Sachs CEO says US headed for debt ‘reckoning’ — with national tab to ‘for sure’ surpass $40T. How to prep now

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America’s ballooning national debt isn’t just a long-term policy concern — it’s setting up the country for serious economic strain, according to Goldman Sachs CEO David Solomon.

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Speaking at the Economic Club of Washington, Solomon noted that U.S. debt has surged since the financial crisis — and that trajectory isn’t slowing.

“We've taken the debt in the last 15 plus years, kind of since the financial crisis, from $7 trillion to $38 trillion,” he said. (1) “And just refinancing it for the rest of the decade … if you look at current rates, is going to grow it into the low 40s for sure.”

That increase alone doesn’t guarantee disaster. But Solomon argues that without stronger economic growth, a painful adjustment could follow.

“If we continue on the current course and we don't take the growth level up, there will be a reckoning,” he cautioned, adding that “the path out is a growth path.”

The concern isn’t only the headline number. Higher debt requires more buyers — and if foreign appetite fades, the burden increasingly shifts to Americans themselves.

“We have to find people to buy and finance our debt,” Solomon said. “Ultimately, it's not going to other people around the world if it keeps growing — it's going to turn to us and that crowds out investment that ultimately slows growth and it can become a problem.”

Cutting spending may appear to be the obvious fix, but Solomon suggested that may be easier said than done. He noted that “aggressive” fiscal stimulus has become “embedded in the way” democratic economies — including the U.S. — operate, adding that it “doesn’t seem like we have an ability to pull it back.”

Solomon isn’t alone in sounding the alarm. Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has warned that America is heading toward a “debt death spiral,” where the government must borrow simply to pay interest — a vicious cycle that accelerates over time.

Dalio doesn’t expect an outright default, but he sees another danger: currency erosion.

“There won't be a default — the central bank will come in and we'll print the money and buy it,” he said. “And that's where there's the depreciation of money.”

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Many economists have echoed that concern. (2) High debt levels can fuel inflation, eroding the dollar’s purchasing power — a trend Americans already feel. According to the Federal Reserve Bank of Minneapolis, $100 in 2025 buys what $12.05 did in 1970. (3)

The good news? Savvy investors have long found ways to protect their own finances — even as policymakers wrestle with theirs.

Dalio’s safe haven

To shock-proof your investments, Dalio emphasized the value of diversification — and highlighted one time-tested asset in particular.

“People don't have, typically, an adequate amount of gold in their portfolio,” he said. “When bad times come, gold is a very effective diversifier.”

Gold is considered a go-to safe haven. It can’t be printed out of thin air like fiat money and because it’s not tied to any single country, currency or economy, investors flock to it during periods of economic turmoil or geopolitical uncertainty, driving up its value.

Dalio also pointed out that the pros are acting accordingly. Central banks “are acquiring gold now as a diversifier,” he said — and he believes it’s “prudent” for individual investors to consider allocating “somewhere between 10% or 15%” of their portfolios to the metal.

The market’s performance has reinforced that view. Even with a recent pullback, gold prices are still up more than 45% over the past year.

Other prominent voices see further potential. JPMorgan CEO Jamie Dimon recently said that in this environment, gold can “easily” rise to $10,000 an ounce.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an option for those looking to help shield their retirement funds against economic uncertainties.

When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals for free.

Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)

A time-tested income play

Beyond gold, real estate has long been another go-to asset for investors looking to protect — and steadily grow — their wealth during inflationary periods.

When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.

Over the past five years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by 47%, reflecting strong demand and limited housing supply. (4)

Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn’t exactly hands-off work — managing tenants, maintenance and repairs can quickly eat into your time (and returns).

The good news? You don’t need to buy a property outright — or deal with leaky faucets — to invest in real estate today. Crowdfunding platforms like Arrived offer an easier way to get exposure to this income-generating asset class.

Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.

The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase and then sit back as you start receiving any positive rental income distributions from your investment.

Another option is Mogul, a real estate investment platform offering fractional ownership in blue-chip rental properties. Investors can earn monthly rental income, benefit from real-time appreciation and enjoy potential tax advantages — all without a hefty down payment or those dreaded 3 a.m. tenant calls.

Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.

Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

A finer alternative

It’s easy to see why great works of art tend to appreciate over time. Supply is limited and many famous pieces have already been snatched up by museums and collectors. That scarcity also makes art an attractive option for investors looking to diversify and preserve wealth during periods of high inflation.

In 2022 — shortly after U.S. inflation hit a 40-year high — a collection of art owned by the late Microsoft co-founder Paul Allen sold for $1.5 billion at Christie’s New York, making it the most valuable collection in auction history. (5)

Investing in art was traditionally a privilege reserved for the ultra-wealthy.

Now, that’s changed with Masterworks — a platform for investing in shares of blue-chip artwork by renowned artists, including Pablo Picasso, Jean-Michel Basquiat and Banksy. It’s easy to use and with 23 successful exits to date, every one of them has been profitable thus far.

Simply browse their impressive portfolio of paintings and choose how many shares you’d like to buy. Masterworks will handle all the details, making high-end art investments both accessible and effortless.

Masterworks has distributed roughly $61 million back to investors. New offerings have sold out in minutes, but you can skip their waitlist here. See important Regulation A disclosures at Masterworks.com/cd

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

@TheEconomicClub (1); Peter G. Peterson Foundation (2); Federal Reserve Bank of Minneapolis (3); S&P Global (4); Christie’s (5)

This article originally appeared on Moneywise.com under the title: Goldman Sachs CEO says US headed for debt ‘reckoning’ — with national tab to ‘for sure’ surpass $40T. How to prep now

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