Bridgewater founder Ray Dalio issued a stark warning on Wednesday about the escalating U.S. debt crisis, predicting “shocking developments” as the country struggles with rising deficits and a growing debt burden.
“Some people think, ‘oh, we’ll handle it because we’ve handled it so far,’” Dalio said. “I don’t think they understand the mechanics of debt. There’s a supply-demand problem, so they have to sell a quantity of debt that the world is not going to want to buy, and that’s a set of circumstances that is imminent.”
Dalio, speaking at a televised event in Singapore, suggested that the U.S. may be forced to restructure its debt, pressure other countries into purchasing U.S. debt, or even halt payments to creditor nations for political reasons. “You are going to see shocking developments in terms of how that’s going to be dealt with—things that may not have happened in our lifetimes, but things that have happened throughout history,” he warned.
His comments come just weeks after President Donald Trump pledged to balance the federal budget, a goal that has not been achieved in 24 years. “In the near future, I want to do what has not been done in 24 years: Balance the federal budget,” Trump declared before a joint session of Congress.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, dismissed Trump’s pledge as unrealistic. She suggested that reducing the deficit to 3% of GDP, a figure also cited by Treasury Secretary Scott Bessent, would require $7.5 trillion in savings over ten years. “While aggressive, it is doable if Congress starts immediately and scours all parts of the budget, including both spending and taxes,” she said.
Republicans have largely ruled out tax increases, with the House instead proposing a $4.5 trillion bill extending Trump-era tax cuts. The legislation would allow for $2.8 trillion in additional deficit spending through 2034.
The federal government has ended the fiscal year with a budget surplus only four times in the past 50 years, last achieving a surplus in 2001. The Congressional Budget Office (CBO) projects that U.S. interest costs will more than double as a percentage of GDP between 2024 and 2054, driven by rising interest rates and expanding debt. The latest CBO report estimates public debt will reach $52 trillion by 2035, equating to 118% of GDP and surpassing the previous record set after World War II in 1946.
As interest spending continues to rise and deficits remain high, Dalio’s warning underscores the urgent need for fiscal reform to avert a potential financial crisis.
