Billionaire investor and founder of Bridgewater Associates, Ray Dalio, has sounded the alarm on the U.S. fiscal trajectory following the passage of the ‘One Big, Beautiful Bill Act.’
What Happened: In a post on X, Dalio projected that the new budget, with annual spending of $7 trillion against $5 trillion in revenue, will balloon the national debt to a staggering $425,000 per American family over the next decade.
Currently at $230,000 per family, this represents a debt-to-GDP ratio climbing from 100% to 130%, with interest payments expected to surge from $1 trillion to $2 trillion annually.
According to Dalio, this “will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels.”
In the three possibilities mentioned by Dalio, one hinted at the economic theory of Ricardian equivalence at play, suggesting that rational individuals would anticipate that a debt-financed tax cut would lead to future tax increases to pay off the debt.
He explains that this printing and devaluing is not good for those holding bonds as a …