Bridgewater's Dalio issues another warning: The surge in U.S. debt reintroduces pre-World War II risks
Ray Dalio, the founder of Bridgewater, warned that the rapid rise in U.S. government debt is creating a situation very similar to the years leading up to World War II. He pointed out that the increase in debt relative to income will squeeze disposable spending space and criticized politicians from both parties in the U.S., calling for tax increases and spending cuts to address the deficit/debt bomb. According to CBO data, U.S. publicly held debt has reached 99% of GDP and is expected to rise to 116% by 2034. Dalio also mentioned the intensifying global conflicts and wealth inequality, warning of potential civil war risks
According to the Zhitong Finance APP, Ray Dalio, the founder of Bridgewater, warned that the rapid rise in U.S. government debt is creating a situation "extremely similar" to the years before World War II. Dalio stated, "When debt rises relative to income, it’s like plaque building up in the arteries, eventually squeezing out the space available for spending."
Dalio has long warned about the risks posed by the surge in U.S. debt. Last month, he referred to it as a threat to the "monetary order." He criticized politicians from both U.S. parties and called for a response to what he termed the "deficit/debt bomb" through a combination of "tax increases and spending cuts." According to data from the Congressional Budget Office (CBO), U.S. publicly held debt reached 99% of GDP last year and is projected to rise to 116% of GDP by 2034, which would set a new historical high.
Dalio also pointed out that global conflicts and wealth inequality are exacerbating a troubling environment. When asked whether another world war could break out, he stated that the U.S. and other regions are experiencing "a form of civil war," rooted in "irreconcilable differences." He said, "These conflicts will evolve into a contest of power between the two sides. The key is to face these disputes. If we are not vigilant about this, the risks will be greater."
