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Ray Dalio: Debt Crisis Issues Are Urgent

  • Ray Dalio, founder of Bridgewater Associates, warned on June 4, 2025, that the US debt burden risks causing a severe economic crisis.
  • He explained that the increasing US debt, currently around $30 trillion, is causing an imbalance between bond supply and demand, posing risks to economic stability.
  • Dalio compared the US credit system to a circulatory system, noting that $1 trillion in interest payments equals roughly 20% of US revenue and slows growth.
  • Dalio proposed a '3 Percent 3-Part Solution' involving spending cuts, tax increases of about 4% each, and a modest 1–1.5% interest rate reduction to lower interest payments by 1–2% of GDP on average.
  • He said adopting this balanced approach could stabilize debt without shocking the economy, while failure to act risks a self-reinforcing debt spiral and major economic disruption.
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caithness-business.co.uk broke the news in on Wednesday, June 4, 2025.
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