Billionaire Ray Dalio Pushes ‘3% Solution’ to Avert U.S. Debt Crisis
Billionaire hedge fund manager Ray Dalio has sounded the alarm on America's soaring deficit, calling for urgent action to avoid a looming economic breakdown.
In a recent interview with The New York Times, Dalio outlined what he calls the “3% solution”—a multi-pronged fiscal strategy aimed at stabilizing the country’s finances before a full-blown crisis hits.
Dalio Proposes Deficit Reduction to 3% of GDP
Dalio’s framework centers on lowering the annual deficit-to-GDP ratio from its current 7% down to 3%. The strategy relies on three levers: cutting federal spending, raising tax revenue, and reducing interest rates. He argues that this combination is not only feasible but has already proven effective during the 1991–1998 period in the U.S., when similar measures were implemented.
“The 3% solution is very practical,” Dalio stated. “It has worked many times in many places.”
Debt Crisis Could Be the Inevitable Trigger
Despite widespread agreement among policymakers on the need for change, Dalio says partisanship continues to block any meaningful action. He likens the situation to “being on a boat headed for the rocks,” with leaders acknowledging the danger but refusing to steer.
“All the political decision makers… agree that we are likely headed for a terrible outcome if the deficit isn’t cut,” Dalio said. “The forcing mechanism will likely be a debt crisis and all that goes with it.”
Dalio’s remarks add to growing concerns over America’s long-term fiscal path, as the national debt approaches unsustainable levels. Whether Congress will act before markets force its hand remains to be seen.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
