Wall Street veteran who predicted 2008 meltdown issues urgent warning of 'economic heart attack' for US

Daily Mail​

6 days ago

Billionaire hedge fund titan Ray Dalio, who famously predicted the 2008 financial crash, has sounded a stark alarm over America's spiraling debt.
Dalio warned that without swift action to slash the federal deficit, the US could face an 'economic heart attack' in the next three years.
'If the US doesn't cut the deficit to 3 percent of the GDP, and soon, we risk facing an economic heart attack in the next three years,' Dalio wrote on X.
'The good news is that these cuts are possible.'
The national debt is nearing $37 trillion — equal to 99 percent of GDP — and the Congressional Budget Office projects it could hit 150 percent by 2055.
Dalio, founder of Bridgewater Associates — the world's biggest hedge fund — said a 4 percent adjustment to spending and tax revenues could stabilize the economy and even lower interest rates.
'We know this kind of balance is possible because it happened between 1991 and 1998,' he wrote, pointing to previous bipartisan deficit deals.
However, Dalio warned that squabbling between Republicans and Democrats will put off the necessary cuts and only serve to see the national debt and its interest payments grow even more.
'My fear is that we will probably not make these needed cuts due to political reasons, and will have even more debt and debt service encroaching on our spending that will ultimately lead to a serious supply-demand problem.'
Dalio has repeatedly warned that economic decisions made by the White House will end in economic catastrophe.
In April the billionaire spoke against Trump's decision to launch a global trade war via tariffs on America's trading partners.
'Some people believe that the tariff disruptions will settle down as more negotiations happen and greater thought is given to how to structure them to work in a sensible way,' Dalio wrote in a post on social media site X.
'I am now hearing from a large and growing number of people who are having to deal with these issues that it is already too late.'
Dalio has joined a group of other bankers, analysts, and executives who believe the US is heading for a perilous economic moment.
JPMorgan's CEO Jamie Dimon warned last month that the US economy was on shifting 'tectonic plates' and warned that inflation could once again rear its ugly head.
'You have all these really complex, moving tectonic plates around trade, economics, geopolitics, and future factors, which I think are inflationary: military, restructuring of trade, ongoing fiscal deficits,; he told the Morgan Stanley US Financials Conference.
The co-founder of Home Depot Ken Lagone also raised concerns about US debt, and said it is a 'scary' indicator for the state of the economy.
The billionaire said he hoped Washington would heed his warning that 'we have to be mindful of the importance of our status in the world economy and the world markets.
'If we fritter that away, we're in trouble,' the 89-year-old said.
'Four weeks ago, we couldn't float a 20-year bond. They were unbiased. That's a dangerous signal. That's the beginning,' Langone said referencing recent crises in the bond market.
As well as rising debt interest payments, the federal government is also seeing the squeeze from bigger demands on Medicare and Social Security as the population ages and lives longer.