Billionaire investor Ray Dalio has raised alarms over the rising U.S. debt, warning that it could lead to an “economic heart attack.” He believes the country’s growing debt burden and rising interest payments are becoming unsustainable and may soon overwhelm government finances.
Dalio noted that the U.S. is running a massive $2 trillion budget deficit this year, adding to a national debt of around $30 trillion — about six times the government’s annual revenue. In just 10 years, he fears debt servicing costs (interest and principal) could hit $50–55 trillion, or nearly 7 times the revenue.
Currently, the U.S. pays about $1 trillion annually in interest alone, which is 20% of its revenue and half of the yearly deficit. On top of that, the government must repay around $10 trillion in principal — nearly double its income. This could squeeze out other spending and lead to instability.
Dalio compared the credit system to the human circulatory system: when used wisely, it boosts growth. But if debt grows too fast without enough income to cover it, it chokes off spending — like “plaque” in arteries — risking a financial breakdown.
He warned of a potential debt rollover crisis, where investors no longer want to buy or hold U.S. debt. If demand for U.S. debt falls, interest rates could rise, slowing the economy. Alternatively, the Federal Reserve might print money to cover shortfalls, which would drive up inflation — creating a dangerous debt spiral.
Dalio outlined three warning signs:
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Debt payments growing too large compared to government income (like plaque buildup).
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Investors selling off U.S. debt (like plaque breaking off and causing a heart attack).
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The Fed printing money to buy debt, which weakens the currency (like administering too much medicine that causes new problems).
As a solution, Dalio proposed a “3 Percent 3-Part Plan”:
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Cut spending
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Raise taxes
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Slightly lower interest rates
He believes this would help stabilize debt and boost the economy without causing a major shock.
Dalio also noted that other major economies — the UK, EU, China, and Japan — face similar problems. To prepare, he advises investors to diversify across countries and asset types, reduce exposure to bonds, and hold gold and some Bitcoin to hedge against potential debt-related crises.
Dalio expands on these views in his new book, “How Countries Go Broke: The Big Cycle,” arguing that the U.S. is nearing a tipping point — a “debt death spiral” — that threatens its economic future.
