Billionaire investor Ray Dalio expects the US could face a debt crisis within the next three years, warning that the rising cost of servicing its national debt is increasingly limiting government spending.
Speaking to Bloomberg Television, the Bridgewater Associates founder said the US was approaching its financial limits as debt continues to grow. US government debt surpassed $40 trillion in August, representing an inflation-adjusted increase of more than $10 trillion since 2019.
Ray Dalio Says US Is Approaching Its Limits as Debt Tops $40 Trillion
Dalio said annual interest payments on the debt now exceed $1 trillion, consuming a significant portion of the federal budget and leaving less room for areas including Social Security, healthcare, defence and education.
“When debts accumulate faster than they’re paid back, then debt service costs grow,” Dalio said, warning that higher debt-servicing costs can eventually squeeze other spending.
He also raised concerns about the artificial intelligence boom, saying the industry has become heavily reliant on debt. According to Dalio, some AI hyperscalers are already encountering difficulties accessing credit, while companies may be overinvesting to remain competitive.
He warned that excessive investment could contribute to a technology bubble, particularly if companies later face pressure to raise cash to repay loans or meet other financial obligations.
Dalio has repeatedly warned about the risks posed by rising US debt, describing the trajectory as increasingly difficult to sustain.
