Dalio Warns US Debt Costs Are Crowding Out Everything, Expects Reckoning Within Three Years
Ray Dalio, founder of Bridgewater Associates, stated that U.S. federal spending is about 40% higher than its income, with debt service requirements nearing $11 trillion, roughly twice the government's total revenue. He believes the government's fiscal situation is at an inflection point and anticipates the U.S. will face a debt reckoning in "about three years (plus or minus two years)." He noted that federal interest payments have reached $1.25 trillion annually, while the 10-year U.S. government bond yield reached 4.95% on September 10, and the 30-year government bond yield was 5.37%. Dalio suggested reducing the budget deficit to 3% of GDP by cutting spending, increasing taxes, and lowering interest rates.
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