Ray Dalio Warns of Imminent Debt Crisis in the U.S.

In a recent interview with the Financial Times, Ray Dalio, founder of Bridgewater Associates, warned that the United States is on the brink of a debt-induced economic crisis, drawing parallels to the financial instability of the 1930s.

Dalio attributes the impending crisis to unsustainable national debt levels, escalating interest payments, and diminishing investor confidence in U.S. government securities. He criticizes President Donald Trump's fiscal policies and expresses concern over threats to the Federal Reserve's independence, warning that political interference could undermine the dollar's value and the nation's creditworthiness.

Ray Dalio is the founder of Bridgewater Associates, one of the world's largest hedge funds. Established in 1975, Bridgewater has been influential in global macroeconomic investing. Dalio is renowned for his analysis of economic cycles and debt crises, authoring works such as "How Countries Go Broke," which examines the causes and warning signs of national economic collapses.

Dalio highlights several factors contributing to the looming crisis:

• Unsustainable Debt Levels: The U.S. national debt has surpassed $36.2 trillion, with a debt-to-GDP ratio exceeding 120% as of late 2024.

• Escalating Interest Payments: In fiscal year 2023, the U.S. government spent $659 billion on net interest costs to finance the debt.

• Declining Investor Demand: Foreign holdings of U.S. debt have decreased from 43% in 2015 to 30% recently, indicating waning international confidence.

Dalio criticizes President Donald Trump's fiscal policies, including tax cuts and increased spending, which have contributed to rising deficits. The "Big, Beautiful Bill" proposed by Trump is projected to add at least $3.3 trillion to the national debt by 2034, increasing the debt-to-GDP ratio to 125%.

Dalio expresses concern about threats to the Federal Reserve's independence, cautioning that political pressure to suppress interest rates could undermine the value of the dollar and U.S. creditworthiness.

He draws parallels between current economic and political tensions and those of the 1930s, citing rising populism, geopolitical unrest, and systemic risks from high debts and speculative monetary practices.

In light of diminishing faith in fiat currencies, Dalio suggests that assets like gold and cryptocurrencies could serve as safe havens. As of September 3, 2025, the SPDR Gold Shares ETF (GLD) is trading at $325.59, and Bitcoin (BTC) is priced at $111,552.

The potential debt crisis could lead to increased unemployment, social unrest, and a potential loss of the United States' status as a global economic leader. Dalio warns that without addressing the national debt and pledging to reduce the budget deficit, the U.S. risks entering a crisis where debt could become unsustainable, triggering a series of economic and social disruptions.

Dalio's warnings underscore the urgency for policymakers to address the national debt and fiscal policies to prevent a potential crisis.