EddieJayonCrypto
3 Jul 25
Ray Dalio, founder of Bridgewater Associates, warns that the US faces a major challenge due to rising debt. He predicts the government will lower interest rates and print money to manage debt, but these measures are largely ineffective. Dalio highlights projected deficits, rising debt service costs,...
Ray Dalio, founder of Bridgewater Associates, warns that America faces a significant challenge with its soaring debt levels. In a recent statement to his 1.7 million followers on social media platform X, Dalio predicts that the US government will resort to lowering interest rates and printing money as a strategy to manage the nation's escalating debt obligations, though he cautions that these measures are largely ineffective.
He explains that governments typically lower interest rates and devalue currency when overwhelmed by debt, making it a likely policy path for the US. Dalio points to projections of large deficits and increasing government debt service expenses that will constrain spending. He also expresses doubt about the demand for US debt keeping pace with the necessary supply to be sold.
Dalio references his detailed analysis in “How Countries Go Broke,” where he outlines the mechanics behind these fiscal challenges—a perspective that has gained consensus among stress testers and analysts. He emphasizes that without bipartisan cooperation involving both tax increases and spending cuts, the US cannot sustainably resolve its deficit and debt problems.
According to Dalio, a combined approach—such as a 4% increase in tax revenue paired with a 4% spending reduction—would help restore balance to the supply and demand of US debt and potentially lower interest rates. He stresses the importance of both Republicans and Democrats understanding and acting on this necessity to avert a looming fiscal crisis.