Billionaire investor Ray Dalio has cautioned about the United States’ growing debt crisis, warning that the country is headed toward a series of ‘economic heart attacks’ unless significant changes are made.
Dalio estimated that within the next decade, the U.S. government could be spending between $50 trillion and $55 trillion just to service its debt, an amount roughly 6.5 to 7 times greater than its annual revenue, he said in an X summary of his new book How Countries Go Broke: The Big Cycle on June 3.
“This is especially true now as I see the U.S. and other countries headed toward having the equivalent of economic heart attacks. That led me to write How Countries Go Broke: The Big Cycle,” Dalio said.
To make matters worse, annual interest payments alone could soar to $1 trillion, consuming 20% of government revenue and accounting for half of the current budget deficit.
Dalio described the situation as nearing a financial tipping point. U.S. debt becomes riskier as interest rates rise, dampening investor demand and pushing higher rates. This, he warned, creates a dangerous feedback loop that could severely destabilize the economy.
“Even though this progression has happened many times in history, most policy makers and investors think their current circumstances and monetary system won’t change,” Dalio wrote.
Role of policymakers in handling debt
He noted that while similar financial breakdowns have occurred throughout history, many policymakers and investors continue to assume that the current system is somehow immune.
“To me, that suggests that US policymakers should be more, not less, conservative in dealing with the government’s finances because the worst thing possible would be to have its finances in bad shape during difficult times,” he added.
According to the Bridgewater Associates founder, this mindset is misguided and risky, particularly as early warning signs emerge.
In light of this, he emphasized the need for U.S. leaders to adopt a more cautious and responsible approach to managing the nation’s finances.
Dalio’s warnings come in the wake of the ‘One Big Beautiful Bill,’ passed by the House, which faces criticism for increasing the federal deficit. Critics, including Elon Musk and fiscal conservatives, argue it undermines budgetary responsibility.
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