June 3, 2025
Article from MSN by John Towfighi
Article Synopsis
Billionaire investor Ray Dalio warns that while the U.S. faces a low risk of an immediate debt crisis, it is at high long-term risk of a debt “death spiral” — where rising interest rates, growing deficits, and reduced investor demand feed into one another. He criticizes policy decisions, such as former President Trump’s tax cuts, for increasing deficits without offsetting spending cuts.
Dalio warns that ballooning debt could crowd out essential government functions, destabilize markets, and eventually spook global investors. With U.S. debt now at 123% of GDP, he argues that policymakers must act more conservatively before a tipping point is reached — possibly within three years.
