Bridgewater Associates founder Ray Dalio discusses response to the U.S. debt on ‘The Claman Countdown.’
Congress formally handed President Donald Trump’s “large, stunning invoice,” and billionaire Ray Dalio is warning concerning the potential financial penalties, which may embrace spending cuts, main tax will increase and big cash printing.
“Except this path is quickly rectified to convey the finances deficit from roughly 7% of [gross domestic product] to about 3% by making changes to spending, taxes, and rates of interest, large, painful disruptions will possible happen,” Dalio, the founding father of Bridgewater Associates, wrote in a publish on X Thursday.
Dalio mentioned the invoice, which now heads to the president’s desk to be signed into legislation, is anticipated to lead to yearly deficits of $2 trillion with revenues of about $5 trillion exceeded by spending of about $7 trillion.
This deficit would improve the nationwide debt over the subsequent decade, pushing the debt, at the moment the equal of about $230,000 per U.S. household, to about $425,000 per household, he warned.
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Ray Dalio, founder and CIO mentor of Bridgewater Associates, speaks onstage throughout The Wall Avenue Journal’s 2024 The Future Of All the pieces Pageant at Spring Studios Could 22, 2024, in New York Metropolis. (Dia Dipasupil/Getty Photos / Getty Photos)
Paying off this debt will even develop into more and more costly. Curiosity and principal funds on the debt would rise from round $10 trillion, $1 trillion of which is curiosity, to round $18 trillion, $2 trillion of which might be curiosity. This is able to lead to both spending being slashed, “unimaginable” tax will increase or a number of “printing and devaluing of cash and pushing rates of interest to unattractively low ranges,” he mentioned.
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“This printing and devaluing is just not good for these holding bonds as a storehold of wealth, and what’s dangerous for bonds and U.S. credit score markets is dangerous for everybody, as a result of the U.S. Treasury market is the spine of all capital markets, that are the backbones of our financial and social circumstances,” Dalio mentioned.
Speaker of the Home Mike Johnson, R-La., shakes fingers with Home Majority Whip Tom Emmer, R-Minn., and Home Republican Convention Chair Lisa McClain, R-Mich., alongside different Home Republicans throughout an enrollment ceremony for the One, Large, Beautif (Kevin Dietsch/Getty Photos / Getty Photos)
Final month, Dalio equally sounded the alarm on America’s continual spending on FOX Enterprise Community’s “The Claman Countdown,” saying the U.S. is headed for an “financial coronary heart assault.”
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“We’re spending 40% greater than we’re taking in, and it is a continual downside,” he mentioned. “So, what you are seeing is the debt service funds starting to squeeze away, not starting, properly, into squeezing away. So, it is like plaque within the arteries squeezing away shopping for energy. And, as you are able to do the numbers, you will note you could have an financial coronary heart assault because of that.”
President Donald Trump pumps his fist as he boards Air Pressure One at Morristown Municipal Airport in Morristown, N.J., June 21, 2025. (Mandel Ngan/AFP by way of Getty Photos / Getty Photos)
On Thursday afternoon, Congress handed Trump’s “large, stunning invoice” after back-to-back sleepless periods for each the Home and Senate. The invoice, which advances Trump’s insurance policies on taxes, the border, protection, power and the nationwide debt, narrowly handed the Home of Representatives in a principally party-line vote.
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All however two Home Republicans, Thomas Massie, R-Ky., and Brian Fitzpatrick, R-Pa., voted for the invoice, which handed 218-214.
