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Ray Dalio warns economic stability threatened by rising national debt

Dalio issues a stark warning as the U.S. national debt approaches $37 trillion.

July 24, 2025 at 07:09 PM

Ray Dalio issues his most dire warning to America yet: The ballooning $37 trillion deficit will trigger an 'economic heart attack'

Ray Dalio raises concerns about the U.S. national debt reaching alarming levels.

Ray Dalio warns over $37 trillion deficit threatens economic stability

Ray Dalio, founder of Bridgewater Associates, has issued a grave warning regarding the U.S. national debt, which has soared to nearly $37 trillion. He described the situation as an impending "economic heart attack," urging lawmakers to adopt fiscal discipline reminiscent of the 1990s. In interviews, Dalio emphasized that current spending levels are unsustainable, with the government spending 40% more than its income. He warned that continuing down this path could force the U.S. to borrow just to cover interest payments, risking a systemic financial breakdown. While Dalio acknowledges the difficulty of bipartisan action, he believes it is still possible to stabilize the situation by reducing the federal deficit to 3% of GDP.

Key Takeaways

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Dalio likens U.S. debt to an impending economic heart attack.

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Government overspending now accounts for 40% more than income.

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The national debt has reached nearly $37 trillion.

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Current debt service payments limit funding for essential services.

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Dalio urges a return to fiscal discipline seen in the 1990s.

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Political polarization may hinder necessary fiscal reforms.

"We’re spending 40% more than we’re taking in and this is a chronic problem."

Dalio emphasizes the unsustainable nature of current spending levels.

"Failure to act now will only raise the costs of inevitable reforms."

Dalio warns of the consequences of inaction on reducing the national debt.

"If we change spending and income by 4% while the economy is still good, we’ll be in a much better situation."

Dalio discusses potential solutions to the debt crisis.

"My fear is that we will probably not make these needed cuts due to political reasons."

Dalio expresses skepticism about bipartisan cooperation on fiscal matters.

Dalio's warning highlights a growing concern among economists and policymakers about the future of U.S. fiscal health. His analogy of debt service payments as plaque in arteries vividly illustrates how excessive debt can choke off economic vitality. The call for a return to the fiscal restraint of the 1990s resonates amid growing fears of inflation and a potential financial crisis. However, the suggestion that political unity could lead to effective solutions seems increasingly optimistic, given the current polarized landscape. As the national debt continues to rise, the urgency for a balanced approach becomes ever more pressing.