Billionaire investor Ray Dalio cautioned that the escalating U.S. government debt combined with deep divisions in the nation is fostering a troubling economic and political landscape.
During a Bloomberg TV interview broadcast Friday, the Bridgewater Associates founder compared the current debt buildup to conditions before World War II.
“There’s a dynamic about debt,” Dalio said. “When debt and debt service rise relative to your income, it’s like plaque in the arteries that then begins to squeeze out the spending.”
“One man’s debts are another man’s assets,” he said. “If those don’t give a good real return, they will sell.”
Dalio indicated the U.S. government confronts this situation.
U.S. Treasury Department figures show the gross national debt exceeded $37.8 trillion on Tuesday. Debt held by the public—representing borrowing from external sources like corporations and banks—tops $30 trillion, nearing the nation’s gross domestic product level.
The Congressional Budget Office forecasts the debt will surpass $52 trillion by fiscal 2035’s end.
Warnings from Government Watchdogs
The Government Accountability Office, a nonpartisan oversight body, determined the federal debt growth outpaces economic expansion, deeming it “unsustainable over the long term.”
The office also noted potential consequences from rising debt, including elevated borrowing expenses, increased prices for goods and services, and flat wage growth affecting individual finances.
Political Divisions and Global Conflicts
In the interview, Dalio voiced worries over the nation’s political climate, describing involvement in various “wars.”
“We’re in wars,” he said.
“There is a financial money war. There is a technology war. There’s geopolitical wars. And there are more military wars.”
“And so we have a civil war of some sort, which is developing in the United States and elsewhere where there are irreconcilable differences,” he said.
Dalio mentioned the possibility of overcoming these issues but doubted its likelihood.
“I think that’s a little bit idealistic,” he said. “I have to be a practical person.”
