Hedge Fund Executive Ray Dalio Warns of U S Economic Crisis Due to National Debt
Ray Dalio warns of serious consequences for the U.S. economy if national debt is not addressed, advocating for a reduction in the deficit to ensure economic health.
DUBAI, United Arab Emirates -- Hedge fund titan Ray Dalio issued a fresh warning about the U.S. economy, cautioning that dire consequences could arise if the Trump administration does not address the country's escalating debt.
"It's like if I was a doctor and I was speaking with you about your condition, I would say to you, this is now very, very serious. All of these are major problems," Dalio told CNBC's Dan Murphy at the World Government Summit in Dubai.
"What you need to do is cut your deficit from about seven and a half percent of GDP to 3% of gross domestic product, and you can do that. There are certain things that you can do that cut it in a certain way that'll make it much healthier, so the real problem is a political problem."
The U.S. gross national debt stood at approximately $36.22 trillion as of February 11, with about $28.8 trillion of that as debt held by the public in the form of securities owned by individuals, corporations, state or local governments, Federal Reserve banks, foreign governments, and other entities outside the U.S. government.
High debt means the government spends more on interest payments and is more economically vulnerable in the event of future economic crises. It also leads to higher inflation and creates a burden for future generations.
