Ray Dalio Warns of Severe Economic Consequences from Just-Approved U.S. Budget Bill
Billionaire investor Ray Dalio has issued a stark warning about the long-term financial implications of the newly passed U.S. budget bill, pointing to escalating debt, mounting interest payments, and a looming crisis in the bond market if fiscal policy remains unchanged.
According to Dalio, the bill will result in annual federal spending of about $7 trillion, far exceeding projected revenues of around $5 trillion. This persistent deficit would drive national debt levels even higher, pushing total debt from roughly $10 trillion in principal and interest payments to $18 trillion over the next decade—$2 trillion of which will be interest alone.
He noted that debt is already equivalent to 100% of GDP and around $230,000 per American household. Under current projections, that figure could climb to 130% of GDP and $425,000 per family, a burden he described as “unimaginable.”
Dalio warned that this trajectory leaves the government with few options: slash spending, raise taxes dramatically, or print more money—each carrying serious risks. Excessive money printing would devalue the dollar and likely force interest rates down to unattractive levels, undermining confidence in U.S. bonds.
“The US Treasury market is the backbone of all capital markets,” Dalio said, cautioning that further erosion of trust in U.S. credit could ripple through both economic and social systems.
He emphasized that the only viable path forward is a fiscal course correction: reducing the budget deficit from about 7% of GDP to 3% through disciplined adjustments to spending, taxation, and interest payments. Without such measures, Dalio concluded, “big, painful disruptions will likely occur.”
Kosta Gushterov
Reporter at Coindoo
Kosta joined the team in 2021 and quickly established himself with his thirst for knowledge, incredible dedication, and analytical thinking. He not only covers a wide range of current topics, but also writes excellent reviews, PR articles, and educational materials. His articles are also quoted by other news agencies.
