Ray Dalio, founder of hedge fund major Bridgewater Associates, has issued a stark warning about the state of US government debt, calling for urgent action to reduce the budget deficit to avoid catastrophic economic consequences, according to a report by CNBC.
Speaking at the World Government Summit in Dubai, Dalio said: “It’s like being a doctor warning a patient about their condition — this is now very, very serious,” stressing that the US must reduce its budget deficit from the current 7.5% of GDP to 3% to avoid an “economic heart attack.”
The US gross national debt stood at approximately $36.22tn as of 11 February, with $28.8tn of that held publicly through securities owned by individuals, corporations, state and local governments, Federal Reserve banks, and foreign governments. High debt levels, Dalio noted, increase economic vulnerability, drive inflation, and place a heavy burden on future generations.
Dalio urged political leaders to take responsibility, stating: “Governments must commit to reducing the budget deficit or resign. This requires disciplined policy changes—like changing your diet and exercise routine for better health.”
He warned that failure to act could lead to a crisis in the bond market or broader economic instability. “If we experience the financial equivalent of a heart attack, we will know who is responsible because this situation is preventable,” he said.
When asked about his message to the Trump administration, Dalio emphasised practical and conservative fiscal measures. “How do you cut costs and raise productivity? You need to be conservative in your approach, use sharp pencils, and carefully evaluate the consequences of every action,” he advised.
