Billionaire investor Ray Dalio warned in an August 21 LinkedIn post that the United States is heading toward a major government debt crisis, which he said could arrive "in three years, give or take two, if the course we're on is not changed." The Bridgewater Associates founder pointed to a $4 billion U.S. debt buyback, rising bond yields, a weak dollar and a Japanese sell-off of U.S. bond holdings, and said the U.S. will run roughly a $2 trillion budget shortfall this year alongside $11 trillion in debt service payments, after total U.S. debt topped $40 trillion for the first time earlier in August. Dalio proposed cutting the budget deficit to 3% of GDP by reducing spending, lowering interest rates and boosting tax revenue, while cautioning that the Fed should not push rates down "unnaturally." Treasury Secretary Scott Bessent countered that the deficit has peaked under President Trump and that "We can grow our way out" of the $40 trillion debt, and the Federal Reserve in July called the U.S. financial system "sound and resilient." Government estimates project gross federal debt will reach $64 trillion in a decade, growing faster than the economy, which the Government Accountability Office said could mean higher borrowing rates for mortgages and cars as well as cost-of-living increases paired with wage stagnation.
Bridgewater founder Ray Dalio is the author of the debt-crisis warning, but the news concerns his personal macro view, not the firm's business.
