Ray Dalio, founder of Bridgewater Associates, met with House Budget Chair Jodey Arrington and other House Republicans this week to discuss one of the most urgent and overlooked threats to America’s future: our skyrocketing national debt.
The key takeaway? If we don’t change course soon, we could be facing a full-blown debt crisis.
Billionaire entrepreneur Elon Musk echoed the same concern, warning recently that if the U.S. doesn’t cut its national debt, “we will go bankrupt.” And that’s not hyperbole—it’s a mathematical reality.
How Does a Country Like the U.S. Go Broke?
It doesn’t happen overnight. But the pathway is well-known:
- Debt rises faster than income (GDP)
- Interest payments grow to consume more and more of the budget
- Eventually, the government can’t fund essential services without printing even more money
- This leads to inflation, loss of confidence in the dollar, and a spiral of economic instability
Dalio and Musk are warning that we’re already halfway down this path.
In 2024, the U.S. government took in $4.92 trillion—but spent $6.75 trillion, running a deficit of $1.83 trillion. That’s not a temporary war-time measure. It’s the new normal.
Dalio says this pace is unsustainable, noting that the deficit must be brought down to 3% of GDP to avoid debt servicing costs from consuming the government’s ability to function. Otherwise, interest alone could “squeeze out the government’s ability to spend,” meaning basic services, infrastructure, and even defense could be on the chopping block just to pay interest to bondholders.
But Didn’t GDP Keep Growing?
Yes—and that’s exactly the problem.
Over the last four years, the U.S. GDP has continued to rise. But much of that growth has been artificial, fueled by government spending that’s financed through debt. Since GDP includes government spending as one of its core components, every dollar the government borrows and spends adds to the GDP—even if it’s borrowed irresponsibly.
So technically, the economy “grew.” But it was like maxing out a credit card and calling it income.
And where did that spending go?
Much of it didn’t benefit the average American. We’ve seen:
- Billions in foreign aid with little oversight
- Lavish subsidies to politically connected companies
- Bloated government departments with unclear objectives
- Projects riddled with inefficiencies and minimal return on investment
Meanwhile, basic infrastructure continues to deteriorate, education outcomes remain stagnant, and cost-of-living pressures have worsened.
The Real Cost: Inflation and Dollar Devaluation
To make up for this spending gap, the Treasury has increasingly relied on printing money—a tactic that has quietly devalued the dollar over time.
This kind of monetary expansion, especially when paired with stagnant productivity, leads directly to inflation. Prices go up, wages struggle to keep pace, and the average American is left poorer—even if headline GDP is up.
The warning signs are already here:
- Rising interest rates just to attract buyers for U.S. debt
- Higher inflation that’s proving stubborn
- Global de-dollarization, with countries exploring alternatives to the U.S. dollar
What Happens If We Don’t Act?
Dalio has been clear: ignoring this is like ignoring chest pain before a heart attack.
“Waiting too long is like ignoring plaque buildup until a heart attack occurs,” he said recently.
He warned on Bloomberg’s Odd Lots podcast that if deficit spending isn’t reduced within the next three years, the U.S. could enter a full-blown debt crisis.
Musk agrees. “We will go bankrupt,” he warned. Not in the traditional sense of missing a payment—but in the slow, grinding decline of a nation losing its economic freedom and the trust of its people.
We Will Pay The Price
It’s easy to brush off national debt as someone else’s problem. But if we continue down this road—spending recklessly, printing dollars to patch the gap, and ignoring the mechanics of how nations collapse—we may find out just how wrong that is.
Dalio put it bluntly: if we don’t act, “you own it.”
Because when the next economic shock comes—and it will—it won’t be the billionaires who pay the price. It will be regular Americans.
