Bridgewater Associates founder Ray Dalio said the United States could run into a debt crisis within the next three years as rising interest costs squeeze out other parts of the federal budget. Speaking in an interview cited by Bitcoin.com and conducted by Bloomberg, Dalio pointed to a widening fiscal gap: the U.S. government takes in about $5.5 trillion a year while spending roughly $7.5 trillion, leaving a deficit close to $2 trillion. He said annual federal interest expense is now around $1 trillion, and when maturing debt that must be refinanced is included, total annual debt service and refinancing needs reach about $11 trillion. Dalio also highlighted higher Treasury yields, with the 10-year yield closing at 5.31% on Oct. 5 and the 30-year yield at 5.66%, adding to financing pressure. To address the imbalance, he suggested cutting spending, raising tax revenue and lowering interest rates, with the goal of reducing the fiscal deficit from about 6% of GDP to 3%. On portfolio allocation, Dalio has previously said 10% to 15% could be placed in gold, while Bitcoin should make up only a smaller share.
Bridgewater Associates founder Ray Dalio warned in a Bloomberg interview, cited by Bitcoin.com on Oct. 6, that the United States could face a debt crisis within the next three years as interest payments consume a growing share of the federal budget.
Dalio said the U.S. government brings in about $5.5 trillion in annual revenue and spends roughly $7.5 trillion, leaving a fiscal deficit close to $2 trillion. Federal interest expense now stands at about $1 trillion a year. Once maturing debt that needs to be refinanced is added, total annual debt service and refinancing demand rises to about $11 trillion.
He also pointed to rising Treasury yields. The 10-year U.S. Treasury yield closed at 5.31% on Oct. 5, while the 30-year yield reached 5.66%, increasing the government’s financing burden.
Dalio said the deficit should be reduced from about 6% of GDP to 3% through a mix of spending cuts, higher tax revenue and lower interest rates. On asset allocation, he has previously recommended putting 10% to 15% of a portfolio into gold, with Bitcoin taking only a smaller share.
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