Ray Dalio has raised the alarm about the rapid rise of U.S. debt, warning that America must act before suffering what he calls the financial equivalent of a “heart attack.”
The billionaire investor explained that “debt accumulates like plaque” in a financial system—posing a growing problem for governments as interest payments eat away more and more of their budgets.
Dalio, founder of Bridgewater Associates—the world’s largest hedge fund—spoke with Tucker Carlson at the World Government Summit in Dubai earlier this month.
He compared himself to a doctor speaking to a patient about clogged arteries: “You’re at high risk of a heart attack, essentially, and now the question is—what are you going to do about it?”
As a mentor to Bridgewater’s top three co-investors, Dalio emphasized the importance of taking action—like exercising more—while the “patient” is still in good health. “Don’t wait for it to happen and then try to fix it,” he warned.
The U.S. federal government spent around $6.75 trillion in the last fiscal year but only collected $4.92 trillion in revenue, resulting in a deficit of $1.8 trillion, according to the U.S. Treasury website. Since the year 2000, the national debt has more than tripled, now approaching approximately $36.2 trillion.
Dalio noted that if the U.S. fails to reduce its fiscal deficit from over 6% of GDP to 3% within the next four years, the supply of government bonds will outpace demand—pushing interest rates higher and triggering a dangerous spiral in the Treasury markets.
The author of several books on financial and economic history said that such “trauma” in the “spinal cord” of the financial system would impact all markets—and shake the foundation of money as a store of value as we know it.
Despite Elon Musk’s efforts with the Department of Government Efficiency, Dalio said not enough is being done to confront the debt crisis. His remarks came during a special segment recorded for The Tucker Carlson Show at the Dubai event.
“We need an action plan,” Dalio said, agreeing with Carlson that the lack of one “seems insane.”
