‘There will be a reckoning’: Goldman Sachs CEO says US debt will blow past $40T. How to shockproof your assets

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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.

Speaking at the Economic Club of Washington in late October of last year, 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, it's going to grow it into the low 40s for sure.”

He also noted that without significant growth that “there will be a reckoning.

Since Solomon made his prediction, the U.S. has added an additional $1 trillion to the national debt, which now stands at about $39 trillion (2). The recent war in Iran has added an additional $12 billion to the national debt in just three weeks, according to White House National Economic Council Director Kevin Hassett, speaking to CBS News (3). What’s more, President Donald Trump’s administration has requested an additional $1.5 trillion for the Department of Defense as part of the budget for 2027.

If successful, that would easily tip the national debt past 40 trillion and turn Solomon into something of a prophet.

Even without this increase, the war is also projected to add an additional $200 billion to the national debt, Time reports, quoting Defense Secretary Pete Hegseth (4). This figure may increase if the conflict drags on.

So what does this mean for the nation’s finances, and how could it impact you personally?

Solomon argues that the way out “is a growth path” and without it a painful adjustment could follow this period of heavy debt and high inflation.

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.”

Read More: I’m almost 50 years old and don’t have retirement savings. Is it too late?

The energy crisis caused by the war and its impact on shipping through the Strait of Hormuz may also create serious strain on national finances, in addition to squeezing consumers at the pumps and on their home heating bills.

Time reports that as of mid-March, gas costs 80 cents more per gallon, and the price of airline tickets is also mounting in response to higher fuel prices (5). Then, in early April, the average price at the pump hit $4 per gallon, according to the American Automotive Association (6).

With these indicators, on top of the rest of the economic pressures, other financial experts are now predicting that the national debt could soar well beyond the low 40s. Peter Schiff, famous for predicting the 2008 financial crisis, recently posted on X that “the national debt could hit $50 trillion before Trump leaves office (7).”

Solomon and Schiff aren’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 (8).

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.”

Even Jamie Dimon, the CEO of JPMorgan Chase, called this level of debt “not sustainable.” Like Solomon and Dalio, he believes that it “will bite eventually because you can’t just keep on borrowing money endlessly (9).”

Larry Fink, the CEO of BlackRock, the world's largest money management firm, has also voiced his concern (10).

“The national debt is over $38 trillion and rising,” he said during an interview with Jim Cramer in January. “One day it will matter, and it will show up in confidence in U.S. markets. If foreign buyers hesitate, we could see low inflation but elevated interest rates because deficits are high and financing becomes harder.”

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 (11).

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

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 last year. “When bad times come, gold is a very effective diversifier (12).”

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. Gold prices hit a top price of $5,419.80 per ounce in January amid increasing economic uncertainty (13).

Other prominent voices see further potential. For example, Dimon recently said that in this environment, gold can “easily” rise to $10,000 an ounce (14).

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. Just keep in mind that gold is often best used as just one part of a well-diversified portfolio.

Beyond gold, real estate has long been another go-to asset for investors looking to protect and 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.

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 and deal with leaky faucets to invest in real estate. 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 and vacation rentals with as little as $100 — without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.

The process is simple: browse a curated selection of homes 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 sit back and enjoy the rental income distributions your investment could produce.

For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.

If diversifying into multifamily rentals appeals to you, you could also consider investing with Lightstone DIRECT — a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.

Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.

And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.

How it works is simple: Just sign up with your email, and you can schedule a call with a capital formation expert to assess your investment opportunities. From here, all you have to do is verify your details to begin investing.

Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a 27.6% historical net IRR and 2.54x historical net equity multiple on realized investments since 2004. All told, Lightstone has $12 billion in assets under management, including in industrial and commercial real estate.

As such, even if multifamily rentals don’t appeal to you, Lightstone could still serve you well as an investment vehicle for other real estate verticals.

Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.

“It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months,” Solomon noted, when speaking at the Global Financial Leaders' Investment Summit in November 2025 (15).

Meanwhile, the Shiller P/E has just soared past 40x, a level last seen in 1999, hinting that the decade ahead may bring below-average returns for those tied to the S&P 500 (16).

With these warning signs, diversification isn’t just smart — it’s essential. Billionaires like Jeff Bezos and Bill Gates continue to invest heavily in stocks, but they also carve out a portion of their portfolios for assets that behave differently from the market.

One standout example: post-war and contemporary art, which outpaced the S&P 500 by 15% from 1995 to 2025 while showing near-zero correlation to traditional equities.

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@TheEconomicClub (1); Peter G. Peterson Foundation (2), (5); CBS News (3); Time (4); American Automotive Association (6); @PeterSchiff (7); @CNBCInternationalLive (8); Fortune (9), (14), (15); BlackRock (10); Federal Reserve Bank of Minneapolis (11); CNBC (12); Trading Economics (13); S&P Global (16)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.