Ray Dalio, a hedge fund titan, has issued a warning about the U.S. economy, emphasizing the need to cut the country’s debt. He stressed that the U.S. has a gross national debt of approximately $36.22 trillion, with $28.8 trillion of that held by the public. High debt makes the government more economically vulnerable, leads to higher inflation, and burdens future generations. Dalio likened the situation to a patient needing to change their lifestyle to avoid a heart attack, urging government officials to reduce the budget deficit from 7.5% to 3% of GDP or resign. He emphasized the need for cost-cutting, productivity increases, and conservative decision-making.
Dalio warned of a potential debt crisis in private credit, where borrowers may need to borrow more money to pay off existing debts, leading to a dangerous spiral. He urged caution and prudence in financial decision-making to avoid such a scenario. Bridgewater Associates, the hedge fund founded by Dalio, manages $171.7 billion in assets according to the U.S. Securities and Exchange Commission. He called on the Trump administration to recognize the seriousness of the situation and take necessary actions to address the debt issue before it escalates into a major crisis.
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