Ray Dalio Warns $40 Trillion US Debt Could Trigger Crisis Within 3 Years
Updated
Updated · Yahoo Finance · Aug 25
Ray Dalio Warns $40 Trillion US Debt Could Trigger Crisis Within 3 Years
3 articles · Updated · Yahoo Finance · Aug 25
Summary
Three years, give or take two — that is Ray Dalio’s timeline for a potential U.S. debt crisis if current fiscal trends are not reversed.
Dalio tied the warning to a $40 trillion national debt, rising bond yields, a weaker dollar, a Japanese sell-off of Treasuries and a roughly $2 trillion annual budget shortfall.
He said the risk is an "economic heart attack" in which debt-financed spending seizes up, and argued the deficit must be cut to 3% of GDP through concurrent spending cuts, lower rates and higher tax revenue.
CBO projects the 2026 deficit at about 6% of GDP, or $1.9 trillion, while Dalio said debt-service payments are running at $11 trillion.
Treasury Secretary Scott Bessent pushed back, saying the deficit has already peaked under President Trump and the U.S. can "grow our way out" of the debt load.