Billionaire Ray Dalio Warns of Inevitable US 'Debt Bomb' Crisis, Proposes Solutions

Ray Dalio, founder of Bridgewater Associates, has issued a stark warning about America's escalating debt crisis to his 1.7 million followers on social media platform X. The billionaire investor predicts the US government will likely resort to lowering interest rates and increasing money supply to manage its mounting debt obligations – though he cautions these measures will prove ineffective.

"When nations accumulate excessive debt," Dalio explains, "policymakers typically opt for interest rate cuts and currency devaluation – a predictable approach worth anticipating. Current projections indicate massive deficits, surging government debt, and ballooning debt service costs ahead."

In a detailed analysis referencing his work 'How Countries Go Broke,' Dalio demonstrates why America's political system appears incapable of controlling this financial time bomb. "Debt servicing costs will rapidly escalate, crowding out other spending," he notes. "Even under optimistic scenarios, demand for US debt likely won't match the required supply."

The hedge fund pioneer stresses that sustainable resolution requires bipartisan action: "The deficit crisis demands both tax increases and spending cuts – perhaps a balanced 4% adjustment each. Only this fiscal recalibration can improve debt supply-demand dynamics and subsequently lower interest rates."

Dalio's warning comes as Washington faces mounting pressure to address what he describes as mathematical inevitability rather than political choice. Both Republican and Democratic representatives privately acknowledge this reality, though public solutions remain elusive.