Ray Dalio, founder of Bridgewater Associates, has issued a stark warning about the future of the United States, citing rising national debt and deepening political divisions as critical threats that could steer the country toward internal conflict.
In a recent interview with Bloomberg, Dalio described America as being at a crossroads: either the nation unites around shared interests, or it descends into a cycle of escalating confrontation.
Dalio pointed to the U.S. debt-to-GDP ratio—currently around 125%—as a major red flag. He cautioned that if investors begin to lose confidence in the government’s ability to manage its debt, it could trigger a “debt bomb,” forcing the country into higher borrowing costs or painful budget cuts.
Known for his big-picture economic insights, Dalio has consistently raised concerns about national debt, geopolitical instability, and the changing global financial order. But in his latest comments, he focused heavily on internal U.S. tensions.
Should those tensions continue to grow, Dalio warned, the potential for harm is unprecedented.
“We’re in wars. There is a financial, money war. There’s a technology war, there’s geopolitical wars, and there are more military wars. And so we have a civil war of some sort which is developing in the U.S. and elsewhere, where there are irreconcilable differences.”
He described two possible paths for the country: one where Americans come together for the common good, and another where factions inflict damage on one another in a struggle for control.
Dalio said society may “rise above it and realize that our common good is going to necessitate us dealing with it so that what works for most people is going to work,” but admitted that this outcome might be “a little bit idealistic.”
“I have to be a practical person,” he continued. “I think that these conflicts will become tests of power by each side.”
The warning comes amid data showing deep divisions among Americans. A Gallup poll last year found that 80% of respondents believed the country was “greatly divided” on major issues, with Republicans slightly more likely than Democrats to perceive a sense of unity.
Dalio has long cautioned that geopolitical and economic trends are pointing toward instability. In 2023, he said the likelihood of a third world war had risen to 50% in light of global flashpoints like Russia’s invasion of Ukraine and the Israel-Hamas conflict.
Critics may view Dalio’s predictions as alarmist, but his track record gives them weight. In 2007, Bridgewater began warning about systemic risks in the financial system—warnings that were soon validated by the 2008 financial crisis.
His views on national debt remain especially urgent. Like J.P. Morgan CEO Jamie Dimon and Fed Chair Jerome Powell, Dalio fears that rising U.S. borrowing needs may soon outpace investor demand. If that happens, the U.S. could be forced to offer higher yields or face a buyer exodus—both scenarios that would strain the economy.
Dalio likened this risk to a looming economic heart attack. “When debt and debt service rise relative to your income it’s like plaque in the arteries that then begins to squeeze out the spending,” he said.
He emphasized that these cycles of tension are not new, and that understanding historical patterns is key to managing future risks. “Whenever things are coming along that I had not seen before, I really needed to understand if they happened in history so I can understand the mechanics, which is why I study history,” he said.
