Ray Dalio Issues Stark Warning On US Debt, Says Situation At ‘Dangerous Inflection Point’ As Buying Power Is Now Getting ‘Squeezed’
Billionaire investor Ray Dalio has issued a stark warning about the trajectory of the U.S. government’s finances, describing the national debt situation as being at a critical juncture.
US Debt Near A ‘Dangerous Inflection Point’
On Monday, in a post on X, Dalio stated that the U.S. federal debt was at a “very dangerous inflection point,” adding that the nation was now spending 40% more than it was taking in.
In a video snippet accompanying his post, featuring his recent appearance on Fox News, Dalio compared America’s credit system to a “circulatory system” that sustains the economy. “It brings buying power to the whole economy,” he said.
While debt creation can be healthy when invested productively, he warned that decades of accumulation and mounting interest payments are now “squeezing away buying power.”
Dalio pointed out that the U.S. is approaching a point where it may need to issue new debt just to pay existing obligations, as the nation spends $7 trillion each year, with a “$5 trillion intake,” which he said was “a chronic problem.”
Highlighting the scale of this problem, he said, the U.S. faces “a trillion dollars in interest,” and another “nine trillion dollars of debt” that is maturing soon. On top of that, Washington will need to raise “two trillion dollars of new borrowing,” bringing the total to “$12 trillion” in new debt that the country has to issue.
The former hedge fund manager and founder of Bridgewater Associates likened the situation to clogged arteries, warning that if the current trends persist, the result could be an “economic heart attack,” especially if there are no buyers for such massive amounts of government debt.
‘Very, Very Dark Times’ Ahead
A few weeks ago, Dalio had warned of “very, very dark times” and an uncertain future for major Western economies, including the United States and the United Kingdom, citing their unsustainable debt levels.
Dalio said that the U.S. was playing a “risky game,” with its mounting financial liabilities driving the nation towards a precarious future.
This comes as the U.S. national debt hit an all-time high in August, touching $37 trillion, adding $1 trillion to the figure every five months.
Earlier this year, President Donald Trump approved the Republicans’ tax cut and spending bill, which, according to estimates by the Congressional Budget Office, will add $4.1 trillion to the national debt over the next decade.
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