Ray Dalio sounds the alarm: US heading for an ‘economic heart attack’

The US national debt is growing faster than ever. Yet there appears to be little urgency on the part of the government to turn the tide. And according to an influential investor, America may already be too late and that could have major consequences for the economy.

‘Too late’ to solve the mountain of debt

In a recent episode of the financial podcast ‘Prof G Markets’, billionaire Ray Dalio sounds the alarm about the United States’ debt mountain. The debt has now risen to more than $37.6 trillion, and according to Dalio it is “probably too late” to effectively solve the problem.

Ray Dalio is an American billionaire and founder of Bridgewater Associates, the largest hedge fund in the world. He sees little chance of drastic measures in the coming years. According to him, the main cause of this is political division. “Politicians are now simply unable to make unpopular but necessary decisions,” says Dalio.

According to him, spending cuts and tax increases are essential to reduce the debt. But these solutions are so unpopular that political parties will never reach a solution together.

Without structural reforms, Dalio predicts an increasingly derailing debt dynamic, putting financial markets, confidence in the dollar and the purchasing power of Americans under severe pressure.

The billionaire compares the scenario we are heading to with an “economic heart attack”, where the economy is suffocated by the debt burden and sky-high interest costs.

National debt has exploded since the corona crisis

The US national debt has accelerated since the corona pandemic. In March 2020, the debt stood at $23.7 trillion. Now it is more than $38 trillion, an increase of 60.3 percent in five years. The enormous increase is partly due to hundreds of billions in support packages for families and businesses during the pandemic.

The current government is going one step further by further increasing government expenditure. Dalio expects this will increase debt by another $25 trillion over the next decade. Donald Trump’s “Big Beautiful Bill” package, which is expected to add around $3 trillion to the debt, is also contributing. This would put the total national debt above $60 trillion.

Gold and Bitcoin benefit

In times of increasing financial stress and rapidly rising national debts, investors are seeking refuge in safe havens. We see this reflected in the performance of gold and also of Bitcoin (BTC). The precious metal has risen by more than 57 percent in the past year. Its digital counterpart is also performing strongly: last Monday, BTC reached an all-time high of $126,000, an increase of 35.5 percent since the beginning of this year. After that, the Bitcoin price fell sharply again.